The RBI lends to banks at the repo rate. A six-member MPC decides it, and it changes over time. Check the RBI website for the current rate.
A higher repo rate tends to make loans costlier and may lift savings rates. A lower rate does the opposite. The RBI uses it to manage inflation and growth.
Fixed loans keep the rate. Floating loans can move with a benchmark like the repo rate. Ask how and when your rate can change.
What you'll learn
Lesson 13.1
The Bank of Banks
Lotus Bank has promised loans to many customers, but today its cash is running low. Who can lend to a bank?
You'll learn: What the repo rate is and who decides it.
Banks Need Cash Too: The RBI can lend to banks for the short term.
The Repo Rate: The repo rate is the price of short-term money for banks.
Who Decides? A six-member MPC decides the repo rate. Check the RBI site for the current value.
Lesson 13.2
Rate Up, Rate Down
When the RBI changes one number, shops, loans and prices can all feel it. How can one number do that?
You'll learn: How the repo rate affects loans, savings and prices.
The Ripple: Repo rate up → loans costlier. Repo rate down → loans cheaper.
Savings Too: Rate changes affect borrowers and savers in opposite ways.
Why Does the RBI Do It? The RBI adjusts the repo rate to manage inflation and growth.
Lesson 13.3
Floating or Fixed?
Two neighbors take the same loan. Months later, one's EMI changes and the other's doesn't. Why?
You'll learn: How fixed and floating loans react to the repo rate.
Two Kinds of Rates: Fixed stays the same. Floating can move with a benchmark like the repo rate.
How Much? A small rate change on a big loan can change yearly interest noticeably.
Choosing: Ask about fixed vs floating, the benchmark and when it changes.
Final challenge
Rates and You
You followed one number from the RBI to your pocket. 10 quick questions!
Try a question
From lesson 13.1: The Bank of Banks
Why might a bank need short-term cash?
It loves borrowing
Its cash on hand is low for a few days
Show the answer
Its cash on hand is low for a few days. Timing gaps happen.
Learn it the Yukti way
Every lesson is a short story told in scenes, with a quick question after each idea and a review at the end. Wrong answers come with a clear explanation, and Practice brings them back until they stick. Examples use Indian rupees and Indian rules, and show in your own currency in the app.
Yukti is for education only, not financial advice. It teaches general ideas and doesn't recommend specific products. Spot a mistake? Email support@yukti.finance and we'll fix it.
yukti