Reverse Repo = Banks Lending to RBI

👉 Reverse Repo Rate is the rate of interest at which banks lend cash to the RBI.
When this fee is excessive, banks park extra money with RBI, decreasing cash provide available in the market.

📊 Example:
A financial institution deposits ₹100 crore with RBI at 3.5% reverse repo fee,
and earns ₹103.5 crore later.

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