Purchase Agreements (REPOs)

 REPOs or repurchase agreements are a form of non-deposit sources of bank’s fund. The main purpose is to use of low risk bank assets for short-term borrowings. It is an agreement between lender and borrower of securities in which the securities are sold temporarily to the lender to get financing and then is bought back after the agreement period. Most agreements in these types of contacts are for over-night to few months.