What is Repo Rate-Linked Lending?

What is Repo Rate-Linked Lending?

Repo Rate Linked Lending is the rate of lending linked to the RBI’s repo rate. Repo rate-linked lending is used by banks to calculate the retail interest rate on loans. It is an external benchmark used by commercial banks and is revised every 3 months. The volatility of interest rates linked to repo rate-linked lending is relatively lower.