What is RBI Repo rate and how does it impact various retail loan interest rates? - Repo rate is the rate of interest at which the Reserve Bank of India lends money to various commercial banks in the country. Banks can borrow funds from RBI in case of any shortfall and pay back the principal amount along with an interest as per the existing repo rate. Repo rate is also used by authorities to control inflation. The increase in repo rates means that the RBI would charge a higher rate of interest for all money given out to various commercial banks. The bank in turn charges its customers a higher rate of interest when it comes to loans to offset the higher interest rate. Therefore an increase in RBI repo rate usually results in higher interest rates for retail loans and vice versa.

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Question: What is RBI Repo rate and how does it impact various retail loan interest rates?

Answer: Repo rate is the rate of interest at which the Reserve Bank of India lends money to various commercial banks in the country. Banks can borrow funds from RBI in case of any shortfall and pay back the principal amount along with an interest as per the existing repo rate. Repo rate is also used by authorities to control inflation.

The increase in repo rates means that the RBI would charge a higher rate of interest for all money given out to various commercial banks. The bank in turn charges its customers a higher rate of interest when it comes to loans to offset the higher interest rate. Therefore an increase in RBI repo rate usually results in higher interest rates for retail loans and vice versa.

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Question: What is RBI Repo rate and how does it impact various retail loan interest rates?

Answer:

Repo rate is the rate of interest at which the Reserve Bank of India lends money to various commercial banks in the country. Banks can borrow funds from RBI in case of any shortfall and pay back the principal amount along with an interest as per the existing repo rate. Repo rate is also used by authorities to control inflation.

The increase in repo rates means that the RBI would charge a higher rate of interest for all money given out to various commercial banks. The bank in turn charges its customers a higher rate of interest when it comes to loans to offset the higher interest rate. Therefore an increase in RBI repo rate usually results in higher interest rates for retail loans and vice versa. Source: CoolInterview.com

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