BANKING AFFAIRS

Detailed explanation-1: -They are also eligible as collaterals for borrowing through market repo as well as borrowing by eligible entities from the RBI under the Liquidity Adjustment Facility (LAF) and special repo conducted under market repo by CCIL.

Detailed explanation-2: -A liquidity adjustment facility (LAF) is a monetary policy tool used in India by the Reserve Bank of India or RBI. The RBI introduced the LAF as part of the outcome of the Narasimham Committee on Banking Sector Reforms of 1998.

Detailed explanation-3: -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.

Detailed explanation-4: -Liquidity adjustment facility (LAF) is a monetary policy which allows banks to borrow money through repurchase agreements (REPO).

Detailed explanation-5: -In this direction, the LAF introduced in June 2000 has now emerged as the principal operating instrument of monetary policy. The LAF enables the Reserve Bank to modulate short-term liquidity under varied financial market conditions in order to ensure stable conditions in the overnight (call) money market.