2018
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Liquidity Infusing System (LIS)
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Statutory liquidity Infuse (SLI)
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Cash Reserve Infuse (CRI)
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Open Market Operations (OMO)
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Detailed explanation-1: -The Reserve Bank of India (RBI), under its Liquidity Adjustment Facility, infuses liquidity in the banking system via repos and sucks it out using reverse repos. The RBI, after assessing liquidity conditions, uses a 14-day variable rate repo and/or reverse repo operation. The quantum is decided by the RBI.
Detailed explanation-2: -What is banking system liquidity? Liquidity in the banking system refers to readily available cash that banks need to meet short-term business and financial needs.
Detailed explanation-3: -Reverse Repo Rate is a tool used by the Reserve Bank of India primarily to absorb liquidity. The Reverse Repo Rate is an important Monetary Policy tool used by the Reserve Bank of India (RBI) to control liquidity and inflation in the economy.
Detailed explanation-4: -A liquidity adjustment facility (LAF) is a tool used in monetary policy, primarily by the Reserve Bank of India (RBI) that allows banks to borrow money through repurchase agreements (repos) or to make loans to the RBI through reverse repo agreements.