1. It is important to appreciate how the Reserve Bank ofIndia (RBI) policy repo rate under the Liquidity Adjustment Facility works. 2. The real sector will also be able to risk manage interest rate risks by using derivatives including interest rate futures - without running the risk of hedge disconnect. 3. It is not a window for banks to borrow clean funds from the RBI - to lend to their customers. 4. Rather - it is a window through which excess government securities held by banks - beyond statutory requirements - can be funded by the RBI. 5. It frees up banks' deposits to be deployed towards lending.