Repo Rate

Banking Awareness Study Material

Repo Rate

Repo Rate


• Repo rate is the rate at which banks borrow funds from the RBI to meet the gap between the demand they are facing for money (loans) and how much they have on hand to lend.


• If the RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.


• It is also known as Repurchase Rate.