Answer Posted / atul p.n

Repo and Reverse Repo

Whenever the banks have any shortage of funds they can
borrow it from RBI. Repo
rate is the rate at which our banks borrow rupees from RBI.


Reverse Repo rate is the rate at which Reserve Bank of
India (RBI) borrows money
from banks. Banks are always happy to lend money to RBI
since their money are in
safe hands with a good interest.

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