• A rainbow is a meteorological phenomenon that is caused by reflection, refraction and dispersion of light in water droplets resulting in a spectrum of light appearing as a circular arc in the sky.
• It is often visible after rainfall due to highly humid atmosphere and absence of air pollution. The position of the sun and the raindrops in relation to the observer need to be just right for a rainbow to form:
• The sun needs to be behind the viewer
• The sun needs to be low in the sky, at an angle of less than 42° above the horizon.
• The lower the sun in the sky the more of an arc of a rainbow the viewer will see Rain, fog or some other source of water droplets must be in front of the viewer The size of the raindrops does not directly affect the geometry of a rainbow, but mist or fog tends to disperse the effect more.
• Rainbows only appear semi-circular over level ground at sunrise or sunset, when the sun is exactly on the horizon, the majority of the time a smaller segment of an arc is seen

Source: ForumIAS