Introduced in April 2022, the SDF lets the RBI absorb extra cash from banks without having to give them government bonds in return. The SDF rate is set 0.25 percentage points below the repo rate, and the Marginal Standing Facility rate 0.25 points above it. Together they form the corridor within which overnight market rates move.
Finance glossary
What is Standing Deposit Facility (SDF)?
An RBI window where banks can park surplus funds overnight without giving collateral; its rate is the floor of the policy corridor.