The rate at which the RBI borrows loans from commercial banks is known as the: (MCAER 2017)

✔Explanation:
The reverse repo rate is the interest rate at which the RBI borrows money from commercial banks. This is a tool used by the RBI to absorb excess liquidity from the banking system.
🔑KEY POINT:
-The Reverse Repo Rate is an important Monetary Policy tool used by the Reserve Bank of India (RBI) to control liquidity and inflation in the economy.
-Under the Reverse Repo Rate, banks deposit excess funds with the RBI and earn interest for it.
-Reverse Repo rate is the rate at which the Reserve Bank of India borrows funds from the commercial banks in the country.
-In other words, it is the rate at which commercial banks in India park their excess money with the Reserve Bank of India usually for the short-term.
-This is another financial instrument used by the RBI to control the supply of money in the nation.
-In case the RBI is falling short on money, they can always ask commercial banks to pitch in with funds and offer them great reverse repo rates in return.
-This gives banks and other financial institutions the opportunity to earn a profit on excess funds.
-The current Reverse Repo Rate of 2022 is 3.35%.