Which of the following is NOT a correct statement with regard to Liquidity Adjustment Facility:
Which of the following is NOT a correct statement with regard to Liquidity Adjustment Facility:
[A]Only Government securities are used as collateral
[B]Repo Inject liquidity in the system, while reverse repo absorbs liquidity from the system
[C]RBI makes separate announcements for Repo and Reverse Repo Rates
[D]Regional Rural Banks are not eligible to participate in Repo auctions
RBI makes separate announcements for Repo and Reverse Repo Rates
RBI only announces Repo Rate. The Reverse Repo Rate is linked to Repo Rate and is 100 basis points (1%) below repo rate. RBI makes decision regarding Repo Rate on the basis of prevalent market conditions and relevant factors.