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MARKET REPO


 
Repo is a repurchase agreement entered into between eligible counterparties for borrowing and lending of funds on a collateralized basis. A repo involves selling of a security with the agreement to repurchase the same at a future date for a predetermined price. The seller of the security receives funds while the buyer of the security receives collateral for the funds he has lent. The rate at which the security will be repurchased in the second leg of the repo is derived from the rate of interest payable on the funds lent and is known as repo rate.
 
Repo transactions are permitted between counterparties and in instruments permitted by the Reserve Bank of India. At present, repoable securities include Central Government dated securities (G-Secs), Treasury Bills (T-Bills), State Development Loans (SDLs) and Corporate Bonds. Recently, RBI also permitted re-repo of securities acquired under reverse repo subject to certain restrictions. Such an arrangement is permitted only in case of dated G-Secs, T-Bills and SDLs. The entities permitted to undertake repo transactions include Scheduled Commercial Banks, Co-operative Banks, Primary Dealers, Mutual Funds, Insurance Companies and corporate entities.
 
A Reverse repo transaction is the mirror image of a repo. It involves buying of securities and lending of short term surplus in the first leg and selling the security at a predetermined rate in the second leg. A repo transaction for one counterparty becomes a reverse repo transaction for the other counterparty.
 
Repo transactions facilitate banks to invest surplus cash for adjusting CRR positions and also for adjusting SLR positions. Clearcorp Repo Order Matching System (CROMS) is an STP enabled anonymous Order Matching Platform launched by Clearcorp Dealing Systems (India) Ltd for facilitating dealing in Market Repos in all kinds of Government Securities. OTC transactions too, are permitted on this platform. The market on an average witnesses volumes in the range of Rs 25,000 – 35,000 Crs.
 
STCI PD has access to CROMS system. We borrow/lend funds/securities on electronic platform as well as in the reported segment. Clients interested in undertaking repo transactions may contact our Funding Desk on 022 66202213/232.
 
 
 

Latest News


In its second bi-monthly policy, the MPC panel kept the policy rate unchanged at 6.25% while maintaining a neutral policy stance.
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The panel lowered its inflation projection to 2-3.5% for H1FY17 and 3.5-4% for H2FY17. Growth projection was also revised lower to 7.3% for FY18.
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India’s retail inflation print eased to fresh record low of 2.18% in May as prices of pulses and vegetables moved into negative territory on an annualized basis.
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India’s WPI based on the revised 2011-12 series edged lower to 3.85% in April as manufactured goods and food articles indicated cooling of prices.
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RBI slashed the Statutory Liquidity Ratio by 50bps to 20% effective from fortnight beginning Jun 24, 2017.
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Consequently, the policy rates are as follows: Repo rate: 6.25%, Reverse Repo rate: 6%, MSF rate: 6.50%.
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India’s Index of Industrial Production (IIP) rose 3% in April from 2.7% in the previous month albeit lower than 6.5% in the year-ago period.
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