Back to Home
/

Glossary

/

Reverse Repo Rate

What is the Reverse Repo Rate?

What do banks do with cash they don't want to lend out? They dump it back with the RBI. The interest the central bank pays them for holding this extra money is the reverse repo rate. Think of it as the exact opposite of the repo rate. If the RBI hikes this rate, banks figure it's much safer to earn guaranteed interest from the government than to deal with regular customers. The result? Home and car loans become harder to get because banks are hoarding cash rather than circulating it.

Our Trusted Partners & Licenses

BSE

BSE

RegisteredMember Code-61117
AMFI

AMFI

RegisteredAdvisor ARN-303477
ONDC

ONDC

InfrastructurePartner
APMI

APMI

RegisteredAdvisor APRN-08681
Digio

Digio

E-Sign & KYC Partner