The rate at which the Reserve Bank of India lends money to commercial banks is called as __________.

The Repo Rate is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks in the event of a shortfall of funds. The repo rate is a crucial tool used by the RBI to control inflation and manage liquidity in the economy. When the RBI lowers the repo rate, it becomes cheaper for commercial banks to borrow money, which can increase liquidity and promote lending.

• Repo Rate is short for Repurchase Agreement Rate, where commercial banks borrow money from the RBI by selling securities to it, with an agreement to repurchase them at a later date.
• It is one of the monetary policy tools used by the RBI to regulate the money supply in the economy.
• Lowering the repo rate encourages commercial banks to lend more, stimulating economic activity, while raising it helps control inflation by making borrowing more expensive.

• Reverse Repo Rate – This is the rate at which the RBI borrows money from commercial banks, effectively withdrawing liquidity from the system.
• CRR (Cash Reserve Ratio) – The percentage of a commercial bank's total deposits that must be kept with the RBI as a reserve.
• SLR (Statutory Liquidity Ratio) – The minimum percentage of a commercial bank’s net demand and time liabilities that it must maintain in the form of liquid cash, gold, or other approved securities.