 The origin of repo rates, one of the component of liquidity adjustment facility, can be traced to as early as 1917 in U.S financial market when war time taxes made other sources of lending unattractive.The introduction of Liquidity adjustment facility in India was on the basis of the recommendations of Narasimham Committee on Banking Sector Reforms (1998).In April 1999, an interim LAF was introduced to provide a ceiling and the fixed rate repos were continued to provide a floor for money market rates.