Repo rate

The repo rate is the interest rate at which the Reserve Bank of India lends short-term funds to commercial banks. It is the benchmark most floating-rate retail loans are linked to. When the RBI's Monetary Policy Committee raises or cuts it, banks must pass the change through to repo-linked loans at least once a quarter. Your loan rate is the repo rate plus a spread covering the bank's margin and your credit profile. Only the spread is negotiable — the benchmark applies identically to every borrower, so a rate cut is not a lender's concession.