repo rate n CRR When RBI wants to increase liquidity in the market by buying government securities under repo, do the banks have the option of not selling it or is it mandatory?
Answer by Jai Parimi:
You said under Repo.
Repo is a repurchase agreement. An agreement is a document agreed upon by both parties. Technically, if banks don't agree they have a choice to opt out.
There is something else called CRR (Cash Reserve Ratio). This ratio maintenance is mandatory.