ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a) Liquidity Adjustment Facility
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b) Liquidity Adjustment Finance
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c) Lending Adjustment Facility
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d) None of These
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Unattempted
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Detailed explanation-1: -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.
Detailed explanation-2: -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-3: -Liquidity adjustment facility (LAF) is a monetary policy which allows banks to borrow money through repurchase agreements (REPO).
Detailed explanation-4: -What is Liquidity Adjustment Facility (LAF)? A LAF is a monetary policy tool used in India by the RBI through which it injects or absorbs liquidity into or from the banking system. It was introduced as a part of the outcome of the Narasimham Committee on Banking Sector Reforms of 1998.
Detailed explanation-5: -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.