Market Stabilization Bond
- MSS bonds bear an interest rate that can boost banks’ income. This incentivizes banks to participate effectively in demonetization drive.
- MSS as SLR bonds: MSS bonds can also be used to calculate banks’ mandatory bond holding.
- MSS bonds does not increase Government’s fiscal deficit.
- According to CRISIL, the stock of G-secs with the RBI, necessary to conduct reverse repo operations, is limited. So MSS is needed.
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