A standing lending facility is a permanent arrangement under which eligible banks may borrow from the central bank, usually overnight, at their own request and at a pre-announced interest rate, provided they supply acceptable collateral. It is the borrowing side of a central bank standing facility system and the counterpart of the standing deposit facility.
The rate is set above the policy interest rate, so banks normally prefer to borrow in the market and turn to the facility only when funds are scarce. This makes its rate a ceiling for overnight market rates, since no bank needs to pay more elsewhere. Examples are the European Central Bank's marginal lending facility, the Federal Reserve's discount window, where the discount rate applies, and the Standing Lending Facility of the People's Bank of China, created in 2013. The facility provides routine liquidity to sound banks and is distinct from emergency support given as lender of last resort.