the rate at which rbi lends money to commercial banks
Bank rate Bank rate in India is determined by Reserve Bank of India (RBI). It is the rate at which RBI gives loan to commercial banks with collateral ( RBI act 1934 sec.49 ) The RBI also provides short term loans to its clients (keeping collateral) which is called the repo rate. RBI revises this rate periodically. However, there is no predetermined schedule. The repo rates are changed re-actively depending on the economy. Like other countries, repo rates affect the money flow into the nation's economy and affect the inflation and commercial banks' lending or interest rate The Indian bank rate is 6.25%[7], which is same as the rate for Marginal Standing Facility (MSF)