MUMBAI (Reuters) - The Reserve Bank of India will offer banks a special two-day funding window through the marginal standing facility or the emergency funding window, given the current market conditions, it said in a release on Saturday.
Banks had been forced to borrow funds at a higher rate in the inter-bank market earlier in the day due to outflows to corporate advance taxes, payable by Sunday.
The collateralised borrowing and lending obligation or the CBLO rate had shot up to as much as 72 percent, the clearing corporation website showed.
The central bank will open the MSF window between 1130-1200 GMT on Saturday and the funds borrowed will be payable on Monday, the release posted on the central bank's website showed. (Reporting by Swati Bhat; Editing by Ron Popeski)