To ensure that these and other institutions do not charge an interest rate much lower than the interest rate on reserves, the Fed uses an overnight reverse repurchase agreement facility as a supplementary policy tool to help control the federal funds rate.
Lenders need to remain cognizant of the fact that the balance sheet growth should not be built by compromising on the prudent conduct. 21. Micro finance in my view, at its core, should focus on understanding the needs of the customer first and offer them adequate levels of support through appropriate financial products.