With effect from May 22, 2020, the repo rate in India is 4.00%, thanks to a hike from the Reserve Bank of India (RBI). This translates to a discount of 40 basis points on the rate. The repo rate was most recently adjusted by the central bank on March 27, 2020, when it was raised to 4.4%. On October 4, 2019, the repo rate was set at 5.15%. 

Differences Between Repo Rate vs Reverse Repo Rate

1. The reverse repo rate is currently at 3.75% after being reduced by 90 basis points earlier. On March 27, 2020, the repo rate was changed from 4.4% to the current 5.25%.

2. On 4 April 2019, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) revised the repo rate. This rate was decreased by 25 basis points, from 6.25% to 6%.

3. The reduction of 25 basis points means that the reverse repo rate is now 5.75 percent. Before the revision on August 1, 2018, the reverse repo rate was 6%. With the most recent reduction, the repo rate has dropped by another 25 basis points, reaching a new low of 5.15%, effective October 4th, 2019.

4. When the repo rate is high, surplus cash is sucked out of the market and when the reverse repo rate is high, cash is poured into the economy.

5. Regardless of market conditions, the repo rate is always set to be greater than the reverse repo rate.

6. Inflation can be managed through adjustments to the repo rate, while the money supply can be managed through adjustments to the reverse repo rate.

The Processing Fee for a Personal Loan:

The personal loan processing fee can range up to 4% of the sanctioned, depending on the lender and applicant’s credit profile.