Reverse Repo Normalisation

Recently, State Bank of India stated that it believes the stage is set for a Reverse Repo Normalisation in India.

About Repo and Reverse Repo Rate

Repo Rate

  • The term ‘Repo’ stands for ‘Repurchase Agreement’. It is the rate at which the Reserve Bank of India (RBI) gives loans to commercial banks against government securities. Reverse repo rate is the interest that RBI pays to banks for the funds that the banks deposit with it.

Implications

  • If the repo rate increases, it means banks are getting funds from RBI at a higher cost.
  • This, in turn, will mean that banks ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material since 2018 of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber

Economy Watch