The correct answer is Repo Rate. Repo Rate is the rate at which the Reserve Bank Of India lends money to commercial banks in India if they face a scarcity of funds. Current Repo Rate: 4%. It is a rate on short-term, collateral-backed borrowing. Repo rate is used by monetary authorities to control inflation. Additional Information Reverse Repo RateIt is the rate at which the Reverse Bank of India borrows funds from commercial banks. It is the rate at which commercial banks in India deposit their excess money with the Reserve Bank of India usually for the short-term. Current Reverse Repo Rate: 3. 35%. Sovereign RateIt is similar to the corporate bond credit ratings. It is based upon an assessment of both the ability and the willingness of a country to service its debt. Prime Lending RateIt is an interest rate used by the banks at which banks lend to customers with good credit.