The regulator's grip
RBI & the repo rate: the price your bank pays the central bank
The rate RBI charges banks to borrow overnight — the price every other rate is built on.
6.50%
Repo rate
illustrative
Why it matters
When the repo rate moves, your branch's loan and deposit rates move with it — usually before the circular reaches you. It's the answer to "why did our home-loan rate jump this quarter?"
A worked example
Repo at 6.5% sets a ~6.25–6.5% floor under every rate in the system. RBI cuts it 0.25% → your bank's cost of funds and loan rates drift down within a quarter or two.
The picture
What it leads to
This is where the whole pricing chain starts: repo → your cost of funds → the margin between what you pay for money and earn on loans.
Where it sits in the map
Follow the causation