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Repos & Reverse Repos

Repurchase Agreements (Repos) and Reverse Repurchase Agreements (Reverse Repos) are instruments with the following features:

  • Issued by the Central Bank on behalf of the Government of Sri Lanka.

  • Essentially short term and usually overnight to a week.

  • Backed by a Guilt Edged collateral

  • An interest bearing loan

  • Interest earnings are exempted from Withholding Tax

  • It is free from Default Risk since the collateral is guaranteed by the Government.

Repo – When the customer purchases the security from the dealer with the intent to sell it back.
Repurchase agreements (Repo) are arrangements which involve the sale for cash, of securities
(usually government securities) at a specified price with a commitment to repurchase the same or
similar securities at a fixed price on a specified future date. The difference between the sale price
and the repurchase price is the interest income. The agreement is called reverse repo when viewed
from the perspective of the securities buyer. A repo is similar to a loan that is collateralized by the
securities underlying the agreement. Most repos are very short-term money market instruments.

NSB Fund Management Co Ltd
No 400, Galle Road,
Colombo 03.
Sri Lanka.

Tel: +94 11 2425010; +94 11 2425012; +94 11 2565956
Fax: +94 11 2574387
Email: [email protected]
SWIFT: NSBFLKLX

Or your nearest NSB Branch or for more information
call us on our 24 hour hotline at
+94 11 2 379 379.
NSB offers an unmatched security for the deposits of our customers,
being 100% guaranteed by the Government of Sri Lanka.

Reverse Repo – When the customer sells a security to the dealer with the intent to buy it back.

A reverse repurchase agreement, or "reverse repo", is the purchase of securities with the agreement to sell them at a higher price at a specific future date. For the party selling the security (and agreeing to repurchase it in the future) it is a repurchase agreement (RP) or repo; for the party on the other end of the transaction (buying the security and agreeing to sell in the future) it is a reverse repurchase agreement (RRP) or reverse repo.


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  Customer Agreement (CA)
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  Repo/ Reverse Repo Applications