In monetary policy operations, the Reverse Repo Rate refers to:

• The Reverse Repo Rate is the rate at which the Reserve Bank of India (RBI) borrows short-term funds from commercial banks. • It forms part of the Liquidity Adjustment Facility (LAF) and is typically used by RBI to absorb liquidity from the banking system. • When banks have excess funds, they park them with RBI and earn interest at the Reverse Repo Rate. • Conversely, the Repo Rate is the rate at which RBI lends to commercial banks. Thus, the correct description is that it is the rate at which banks park surplus funds with RBI.