What is the purpose of the Liquidity Adjustment Facility (LAF) provided by the R

What is the purpose of the Liquidity Adjustment Facility (LAF) provided by the RBI?

What is the purpose of the Liquidity Adjustment Facility (LAF) provided by the RBI?

Step 1: Understand that banks sometimes need extra money to meet their short-term needs.
Step 2: Know that the Reserve Bank of India (RBI) helps banks with this need.
Step 3: Learn that the Liquidity Adjustment Facility (LAF) is a tool used by the RBI.
Step 4: Realize that through LAF, banks can borrow money from the RBI.
Step 5: Understand that banks borrow this money using a process called repurchase agreements.
Step 6: Remember that this helps banks manage their cash flow and ensures they have enough money to operate smoothly.

No concepts available.