Which one among the following is correct about the Repo Rate in the Indian Economy?
It is the rate at which banks borrow funds from the RBI
It is the rate at which banks park their funds with the Central Bank
It is the percentage difference in the prices of repurchase of the bills from the original prices
The correct option is D Both 'a' and 'c'
Repo rate is a mechanism under the Liquidity Adjustment Facility (LAF) under which the banks borrow money from the Central Bank using Government securities as the collateral, with an obligation to buy back the securities later.