Banking

Repo Agreement — Securities Sold Under Repo

The bank raises short-term funding by selling government bonds with an agreement to repurchase.

Account NameTypeDebit ($)Credit ($)
Cash / Central Bank SettlementAsset (+)10,000,000.00-
Repo Liabilities (Borrowings)Liability (+)-10,000,000.00

💡 Accountant's Note

A repo is economically a secured borrowing — the bonds stay on the bank's balance sheet (not derecognized) and the cash received is a liability. The repo rate is expensed as interest over the term.

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