Repo rate and reverse Repo rate..... Meaning
Repo Rate
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1.The rate at which Reserve Bank of India RBI lends money to commercial Banks.
2.Whenever commercial banks are in need of money they can borrow money from RBI.
3.When Repo rate is increased, RBI cannot borrow more money and vice-versa.
4.Current repo rate of India is 6%..........................
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Reverse Repo Rate
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1.The rate at which RBI borrows money from commercial banks.
2.Whenever RBI feel that there is over-flooded of money in the banking system they borrows money from commercial banks.
3.Current Reverse repo rate is 5.75%.............
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