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Banking Awareness is considered to be the high scoring section in any competitive exam. It includes two main portions, current affairs GK and static GK. In this article, we will discuss some really important Banking Awareness topics that are covered in almost all competitive exams. Also, you can download the PDF of lists of different Banking Awareness topics.
In Banking Section, the questions are asked from following topics: History of Banking, banking terms, Marketing of Banking Products, Functions of Banks, Banks and their taglines, schemes, committees related to banking, headquarters of bank, some Banking news related, apps launched by banks, new schemes etc.
In a series of sharing useful study material for upcoming banking exams. Here, we are providing Banking Awareness notes for all banking Exams (IBPS, SBI & Other Banking Exams).
Liquidity Adjustment Facility : Banking Awareness Study Notes
What is Liquidity Adjustment Facility?
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. This arrangement manages liquidity pressures and ensures basic financial-market stability.
Liquidity Adjustment Facility (LAF) was introduced in June, 2000 by the Reserve Bank of India.
The interest rate at which RBI provides liquidity to banks under Liquidity Adjustment Facility is known as Repo rate.The interest rate at which RBI absorbs excess liquidity of banks is known as Reverse Repo Rate.
All Scheduled Commercial Banks (excluding Regional Rural Banks) and Primary Dealers (PDs) having Current Account and SGL Account with Reserve Bank, Mumbai will be eligible to participate in the Repo and Reverse Repo auctions.
Bank cannot sell Government securities to RBI that is part of bank’s SLR (Statutory Liquidity Ratio) quota.
Minimum bid size—
Bids will be received for a minimum amount of Rs.5 crore and in multiples of Rs. 5 crore thereafter.
