Question

The fixed interest rate at which the Reserve Bank absorbs liquidity, on a day-to-day
basis, against the collateral of eligible government securities from banks under the
liquidity adjustment facility ..... ......... Is known as
(a) Reverse repo rate
(b) BankRate
(c) Repo rate
(d) Marginal standing facility​

Answer 1

Answer:

A liquidity adjustment facility (LAF) is a tool used in monetary policy, mainly by the Reserve Bank of India (RBI), which enables banks to borrow money through repurchase agreements (reposals) or banks to lend to the RBI using reverse repo contracts.

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