Which of the following is not true regarding the Repo rate and reverse repo rate instrument used by RBI?
1
Increasing repo rate increases liquidity in banking system.
2
Reverse repo rate increase incentivizes banks to park their excess money with the RBI.
3
At Repo rate RBI purchases government bond from banks with an agreement to buy it back after a fixed time.
4
More than one of the above
5
None of the above