Section 17(12AB) in The Reserve Bank of India Act, 1934
(12AB)dealing in repo or reverse repo:Provided that lending or borrowing of funds by way of repo or reverse repo shall not be subject to any limitation contained in this section.Explanation.— For the purposes of this clause,—(a)“repo” means an instrument for borrowing funds by selling securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to repurchase the said securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed;(b)“reverse repo” means an instrument for lending funds by purchasing securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to resell the said securities on a mutually agreed future date at an agreed price which includes interest for the funds lent;
