Q. Which among the following is a component of the Liquidity Adjustment Facility (LAF) implemented by the Reserve Bank of India (RBI)?
Answer: repurchase agreement
Notes: The Liquidity Adjustment Facility (LAF) is a monetary policy tool that allows banks to borrow money through repurchase agreements. This tool helps RBI to manage liquidity and control inflation by absorbing or injecting liquidity as needed. As part of LAF, banks can borrow money by pledging government securities as collateral.