Liquidity Adjustment Facility (LAF) is a monetary policy tool adopted by the Reserve Bank of India (RBI) to adjust liquidity in the economy on a day-to-day basis, through reverse and reverse repo auctions.

Standing Deposit Facility (SDF) is a monetary policy instrument introduced in the Annual Budget of 2018-19 to absorb excess liquidity from the market in the aftermath of demonetisation. SDF is a liquidity adjustment tool adopted in times of crisis. While under LAF, collateral is to be kept in the form of government securities, under SDF there is no requirement of keeping collateral. However, under both facilities, the interest to be paid is the repo rate.