RBI repo rate effect on bank interest rate

RBI has decreased repo rate recently. Do you know how does it affect the bank interest rate on loan portfolio?

Normally, it has a positive effect on borrowers as they may get benefit in EMI. Every bank declares its new interest rate whenever RBI increases or decreases the repo rate.

Recently RBI reduces repo rate which is good for borrowers. All banks will announce low-interest rate soon.

What is RBI Repo rate?

Banks borrow money from RBI with this rate. It is announced by RBI. It is the opposite of reverse repo rate. RBI repo rate is changed by RBI during the monetary policy.

 

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