Home

Home
EconAxis
About Mukul
Economy and Finance de-mystified!

February 11, 2008
Repo, Reverse Repo, Bank Rate, Call Rate, CRR & SLR Definitions
Posted by Mukul Sharma under Doubts and questions [380] Comments
On huge demand, I am organising a four hours workshop on Economy and Banking for IBPS. All Students interested in attending workshop may register. Following are the details of the Workshop: Date: April 15, 2012 Day: Sunday Venue: Seminar Hall, RWA Centre, Sector 55 NOIDA Time: 10:00 AM to 2:00 PM Contact: Phone: 09582370097 Email: mukul.ibps@gmail.com Registration Open till April 9, 2012 Contents: - Indian Econonmy Overview - Monetary Policy and Fiscal Policy - Repo Rate, Reverse Repo Rate, CRR, SLR - Indian Banking System As requested by Payal, we are explaining the different rates in monetary policy used by RBI
Repo (Repurchase) Rate Repo rate is the rate at which banks borrow funds from the RBI to meet the gap between the demand they are facing for money (loans) and how much they have on hand to lend. If the RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.
Reverse Repo Rate This is the exact opposite of repo rate. The rate at which RBI borrows money from the banks (or banks lend money to the RBI) is termed the reverse repo rate. The RBI uses this tool when it feels there is too much money floating in the banking system If the reverse repo rate is increased, it means the RBI will borrow money from the bank and offer them a lucrative rate of interest. As a result, banks would prefer to keep their money with the RBI (which is absolutely risk free) instead of lending it out (this option comes with a certain amount of risk) Consequently, banks would have lesser funds to lend to their customers. This helps stem the flow of excess money into the economy Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the banks, while repo signifies the rate at which liquidity is injected. Bank Rate This is the rate at which RBI lends money to other banks (or financial institutions . The bank rate signals the central banks long-term outlook on interest rates. If the bank rate moves up, long-term interest rates also tend to move up, and vice-versa. Banks make a profit by borrowing at a lower rate and lending the same funds at a higher rate of interest. If the RBI hikes the bank rate (this is currently 6 per cent), the interest that a bank pays for borrowing money (banks borrow money either from each other or from the RBI) increases. It, in turn, hikes its own lending rates to ensure it continues to make a profit. Call Rate Call rate is the interest rate paid by the banks for lending and borrowing for daily fund requirement. Si nce banks need funds on a daily basis, they lend to and borrow from other banks according to their daily or short-term requirements on a regular basis. CRR Also called the cash reserve ratio, refers to a portion of deposits (as cash) which banks have to keep/maintain with the RBI. This serves two purposes. It ensures that a portion of bank deposits is totally
risk-free and secondly it enables that RBI control liquidity in the system, and thereby, inflation by tying their hands in lending money SLR Besides the CRR, banks are required to invest a portion of their deposits in government securities as a part of their statutory liquidity ratio (SLR) requirements. What SLR does is again restrict the banks leverage in pumping more money into the economy.
Like this:
Like 2 bloggers like this post.
380 RESPONSES TO REPO, REVERSE REPO, BANK RATE, CALL RATE, CRR & SLR DEFINITIONS
1.
Udhay Says:
April 13, 2012 at 4:01 pm
Very simple and fantastic to understand the basics and the terms. Reply
2.
Sneha Says:
April 11, 2012 at 8:31 pm
All the posts and your article to begin with was very helpful Sir ..looking forward to more on economy and budget.. Reply
1.
Mukul Sharma Says:
April 12, 2012 at 2:17 pm
Thanks a lot Reply
3.
Abhishek Kanthed Says:
April 9, 2012 at 4:38 pm
Good explanation! Thanks! Reply
4.
mukta Says:
April 8, 2012 at 10:31 pm
Im not able understand the difference between bank rate and repo rate? Can anybody explain please? Reply
1.
Udita Says:
April 11, 2012 at 8:34 pm
@Mukta : See bank rate is for long term lending by RBI to commercial banks..i.e if banks need money and they borrow it form RBI for longer period (exceeding 90 days ) then it would be lent at bank rate..while if banks want to borrow money for a period lesser than 90 days it would get the money from RBI at Repo rate so it just the matter of time period that the two differ on.. Reply
5.
Prem Kumar Says:
April 3, 2012 at 8:02 pm
Im not able understand the difference between bank rate and repo rate? Can anybody explain please? Reply
6. MRR article Says:
March 29, 2012 at 8:26 pm
MRR article [...]Repo, Reverse Repo, Bank Rate, Call Rate, CRR & SLR Definitions EconAxis[...] Reply
7.
mahesh biradar Says:
March 24, 2012 at 11:47 am
its very important for banking exam thanks Reply
8.
kapil Says:
March 24, 2012 at 11:30 am
thnkx dear for ur kind of information. Reply
9.
Anjali Gaur Says:
March 16, 2012 at 1:18 am
Sir can you tell me whether my concept of relationship between REPO RATE & SLR is correct or not when RBI wants to control flow of funds in the market it increases SLR due to which banks are required to maintain securities according to SLR, on the other hand it increase its REPO RATE so that it can suck cash to control liquidity in the market.. Reply
1.
Mukul Sharma Says:
March 19, 2012 at 12:35 pm
Yes, your understanding is correct overall, the RBI uses SLR very rarely, the more frequently used tools of monetary policy are CRR and Repo and Reverse Repo Reply
10.
Anjali Gaur Says:
March 16, 2012 at 1:10 am
Sir can you tell me whether my concept of relationship between REPO RATE & SLR is correct or not.? When RBI wants to suck cash from the market it increase SLR which means bank are required to keep their securities with RBI according to SLR & on other hand it Increase its REPO RATE also so that it can control liquidity in the market. Reply
11.
prince Says:
March 7, 2012 at 6:39 pm
dear sir, can you tell me that can i get these defnition in hindi and also banking notes which may be helpful for bank clerk exam. if yes sir please tell me that how can i get it . i Reply
1.
Mukul Sharma Says:
March 7, 2012 at 8:36 pm
Hi Prince, Im working on the hindi version of Banking material. By next week, you will see an announcement on this blog regarding the availability of the material in Hindi. Thanks. Reply
1.
Neeraj choudhary Says:
March 14, 2012 at 11:42 pm
Also me
12.
nitesh kesariya Says:
March 6, 2012 at 6:05 pm
hello sir, can u explaine the snsex? And when sensex are increase & decrease,how can be effect it? Reply
1.
Mukul Sharma Says:
March 7, 2012 at 8:37 pm
Complete explanation of sensex is already given in my following post: http://iasmentor.wordpress.com/2011/12/13/is-sensex-a-barometer-of-the-indianeconomy/ If you still have any doubts, feel free to ask me. Reply
13.
aastha Says:
March 1, 2012 at 7:29 pm
whts d difference b/w bank rate and repo rate Reply
1.
mohd mohsin Says:
March 5, 2012 at 7:33 pm
bank rate is the rate at which loans are lent for long time purposes but at repo rate rbi lends the money for short time purposes say ninty days Reply
14.
sheetal Says:
February 29, 2012 at 11:11 pm
tell me about commercial paper ad commercial bill Reply
1.
Ashish Says:
April 3, 2012 at 10:57 pm
commercial bill issued by commercial bank and commercial paper issued by company. Reply
15.
Zara Says:
February 23, 2012 at 8:52 am
Plz gv me clear difference b/w repo rate and bank rate Reply
1.
$amarth Says:
Hello From my point of view Bank Rate is the rate at which RBI discount the bill of commercial bank
& Repo Rate is the rate at which commercial bank borrow money from RBI just because people are demanded 4 loan at high rate and when commercial bank do not have sufficient fund then commercial bank approaches RBI and to gave him money and charge interest after taking money from RBI commercial bank gave loan to people IN Bank rate when RBI have more fund then he approaches to commercial bank to discount their bills at lower rate of interest ( discount their bill means take loan ) Thats the reason Bank rate is lower then Repo rate IN Bank rate RBI give offer to commercial bank and in Repo rate commercial bank approaches RBI Reply
1.
amit Says:
April 8, 2012 at 11:25 am
@ samarth but presently bank rate is 9.5 while repo is 8.5?? well i m not too sure but bank rate is a rate at which commercial bills are rediscounted when bank is in need for money specially in dire circumstances while repo rate is rate at which govt securities are discounted when bank need money normally from RBI
2.
Sat Says:
Guys, for simple understanding of economics, check http://bjnocabbages.blogspot.in/ this guy has written lots of articles under The Explainer series. Reply
1.
$amarth Says:
March 2, 2012 at 9:37 pm
I kn its lots but helpful
2.
samarth Says:
April 11, 2012 at 1:39 pm
@ amit bhai ho bhi skta h bcoz maine abhi itna detail mai nhi study kiya h n mujhe jo lga usske according btaya h
16.
NOOPUR RAGHOJI Says:
What is difference between bank rate and repo rate?both rates refers to the interest rates charged by RBI to the banks .Please give me a subtle distinction between repo rate and bank rate.
Reply
1.
$amarth Says:
Hello From my point of view Bank Rate is the rate at which RBI discount the bill of commercial bank & Repo Rate is the rate at which commercial bank borrow money from RBI just because people are demanded 4 loan at high rate and when commercial bank do not have sufficient fund then commercial bank approaches RBI and to gave him money and charge interest after taking money from RBI commercial bank gave loan to people IN Bank rate when RBI have more fund then he approaches to commercial bank to discount their bills at lower rate of interest ( discount their bill means take loan ) Thats the reason Bank rate is lower then Repo rate Reply
1.
mausam Says:
April 9, 2012 at 10:33 pm
Sir, as u told bank rate is lower then repo rate ..is this a genuine situation because this time repo rate it lower than bank ..plz give some thought
17.
manish aryan Says:
the explanation which u offer are very simple,lucid and crsytal clear infact a laymans languaguekeep the good work onreally awsemethnks for such a blog Reply
18.
sheetal Says:
sir , pls explain term repo and reverse repo in term of liquidity Reply
19.
Bobby Says:
sir, since repo means re purchase of short term securities RBI uses repo and reverse repo techniques to increase or decrease the liquidity in the market. To increase liquidity, RBI buys
government securities from banks under REPO; to decrease liquidity, RBI sells the government securities to banks so how does repo rate makes it expensive for bank to borrow..? Reply
1.
Rohit Says:
hi bobby you have to look it in relatively..its increase in repo rate which makes it expensive to borrow.so when liquidity is high rbi increases repo rate to discourage banks to borrow from RBI in that case banks would be having less to lend Reply
20.
sunil chauhan Says:
January 20, 2012 at 8:52 pm
what is the difference between bank rate and repo rate in both situation RBI lending money to the banks Reply
1.
Mukul Sharma Says:
January 22, 2012 at 11:16 am
Hi Sunil,
Bank Rate is a rate of lending in a long term sense while Repo Rate is a rate of lending in a short term sense. Reply
1.
nishant Says:
repo rate against the securities and bank rate against no security
21.
sunil chauhan Says:
Do RBI lend money to an individual or an individual organisation (can be a manufacturing or service but non financial) except commercial banks Reply
1.
Mukul Sharma Says:
January 22, 2012 at 11:17 am
No, the central bank is a banker of banks that means it only lends to banks and does not have any transactions with individual parties. Reply
22.
Rakesh chaurasia Says:
Your ans is really mind blowing. Thanks Reply
23.
jyothy Says:
Dear Mr.Mukul Sharma, Ur answers are real good and one cud understand the concept very easily. Thanks a lot for sharing ur knowledge with us. I wud b grateful if u pls elaborate abt euro crisis ? Reply
1.
Mukul Sharma Says:
January 6, 2012 at 10:15 am
thanks, sure il write one on Euro soon Reply
2.
jyoti Says:
The description given abt these terms is very understable. i would be very thankful to you if share your knowledge regarding how these terms are going to affect the economic condition of a country Reply
24.
sulekha Says:
hello mr mukul sharma sir plz explain about fdi n walmart Reply
25. Best Shared Hosting Says:
December 23, 2011 at 8:36 am
Best Shared Hosting [...]Repo, Reverse Repo, Bank Rate, Call Rate, CRR & SLR Definitions EconAxis[...] Reply
26.
ankur srivastava Says:
December 19, 2011 at 10:44 pm
sir i just want to know difference between slr and plr??? Reply
1.
Mukul Sharma Says:
SLR is a liquidity ratio defining the amount of liquidity to be kept in a certain from (like govt securities) while PLR is a benchmark rate which is a base for the bank to charge interest rates on specific loans Reply
27.
SKUL Says:
1. Is CRR same for all banks or that depends on amount of total asset value of the bank? 2. What is the difference between curbing inflation by increasing repo rate or by increasing CRR? Reply
28.
sunil kumar reddy H Says:
sir i want to know the exat differenc between Repo rate and Bank rate Reply
1.
Surge Research Support Says:
You will find all the explanations by visiting this linl: http://www.ecofinsurge.co.in/terminology.html Reply
29.
Shiv Says:
Sir I want to know is there any correlation between CRR and SLR. Means purpose of both rate is to suck liquidity from economy.So when RBI decide that it need to put money with itself or with bank. Reply
30.
Vishva Deepak singh Says:
November 28, 2011 at 8:57 pm
Sir i want to ask,what is relation bitween GDP&Netional incom and also corrent banj ret plr,slr,rr,rrr? Reply
31.
saurabh kumar Says:
i want to PLR. Reply
1.
amit Says:
April 8, 2012 at 11:34 am
PLR is prime lending rate is a rate at which commercial banks gives loan to its most trustworthy customers ie. where the risk is minimum or risk weightage average is minimum. but banks can then also lend loan at lower rate than PLR to its customer to attract customer and thats why concept of base rate is introduced. Reply
32.
ganesh Says:
sir, can u plz tell me the impact of RBI policies towards indian economy growth? Reply
1.
Mukul Sharma Says:
Hi Ganesh, If you would have noticed, I had predicted the negative effect of rising interest rates on Indian Economy back in May this year. Refer to my post http://iasmentor.wordpress.com/2011/05/20/the-great-indian-economic-loot-detailsof-daylight-official-burglary-you-ought-to-know/. I would explain this phenomena further in an upcoming post, So please have a read at it. Thanks. Reply
33.
heena Says:
sir, i want to ask what is marginal standing facility rate? Reply
1.
ganesh Says:
hi heena if u get the answer for this., post it to me also., Reply
1.
ganesh Says:
Marginal Standing Facility Rate : Under this scheme, Banks will be able to borrow upto 1% of their respective Net Demand and Time Liabilities. The rate of interest on the amount accessed from this facility will be 100 basis points (i.e. 1%) above the repo rate. This scheme is likely to reduce volatility in the overnight rates and improve monetary transmission. In the policy statement RBI has also declared The stance of monetary policy is, among other things, to manage liquidity to ensure that it remains broadly in balance, with neither a large surplus diluting monetary transmission nor a large deficit choking off fund flows.
2.
heena Says:
sir, plz give the easy definition for u derstanding these term easily Reply
1.
Mukul Sharma Says:
Dear Heena, I have tried to make these definitions as simple as possible. I will still try further if there is any scope.
34.
manik Says:
very thanks for the definitions.it is very helpful for students to learn basics of banking rate.could u please tell the basics of stock market and its opperation Reply
1.
Mukul Sharma Says:
Hi Manik, Working of stock market intrigues many management students. I would surely write a post on this very soon. Keep watching. Reply
35.
shujeetmanij Says:
November 7, 2011 at 11:59 am
i want to know that whats the rate of CLR, SLR, BASE RATE, PLR, CRR Reply
1.
YADIK Says:
YADIK SAY RRR:-7.5%,REPO RATE:-8.5%,BANK RATE:-6%,SLR:-24%,MSF:-9.5% Reply
2.
Mukul Sharma Says:
Please refer to the RBI website. Reply
3.
sri ram Says:
see this rbi site http://www.rbi.org.in/home.aspx Reply
36.
amit pahal Says:
sir,please give the easy def. Thans Reply
37.
Mohana Says:
Hello sir, Thank you for the simple explanation for understanding these terms easily. I want to know what is Marginal standard facility rate. Please explain its definition also tell me why and how it is used. Reply
38.
Kevin Says:
Thank you for this article. It was clear and concise and easy to understand. Reply
1.
Mukul Sharma Says:
Thanks, I appreciate your appreciation. Reply
39.
uday Says:
hello sir, simple explanation for all terms. anyone can understand by reading this page. thank for contribution sir.. Reply
1.
Mukul Sharma Says:
If my articles better your understanding, the pleasure is all mine.
Reply
1.
sri ram Says:
could u tell main diff b/w base rate and repo rate.plz explain it breifly
40.
nikhil jangid Says:
October 26, 2011 at 12:28 pm
sir, i am nikhil and want to know. why economic crisis makes effect on all over world ? Reply
1.
Mukul Sharma Says:
October 31, 2011 at 2:05 pm
Hi Nikhil, Today the economies of the world are closely integrated than ever before. So if there is a crisis in any important part of the world like Europe, its ill-effects are bound to show in other economies which interact with the affected region. World markets are closely related as companies of one country is having customers in other countries, raw materials used on one country are consumed in another country, commodity prices are followed globally as they affect the whole world, investment conditions in one country affects those in other countries and other such factors.
Reply
41.
K. Rakesh Krishna Says:
October 24, 2011 at 11:10 am
Hi This is Rakesh, Am an Assistant Professor in MVGR College, Vizianagaram. The site is so helpful to students, especially Finance & Economics Students. Required your help some aspects, waiting for your kind action & reply. rakeshkrishna.kv@gmail.com Reply
1.
Mukul Sharma Says:
October 26, 2011 at 9:41 am
hi rakesh, thanks for your appreciation. would be glad to help in any manner i could. thanks. Reply
42.
linson Says:
if the repo rate is higher than bank rate why should banks borrow giving higher repo rate. Generally, the rate at which it is possible to borrow through a repo should be lower than the
same offered on unsecured (or clean) interbank loan for the reason that it is a collateralised transaction and the credit worthiness of the issuer of the security is often higher than the seller. Reply
1.
Mukul Sharma Says:
Hi, While bank rate is a long term rate, repo rate is a short term rate. So please note that for their short term requirements, banks will borrow at the repo rate. the interbank rate that you are talking about (technically called as call money rate) is the rate for shortfall of funds on daily basis for the bank. Therefore it cannot be compared with repo rate which is for funds required for short term reasons. Reply
43.
priyaharvestr Says:
October 13, 2011 at 12:12 pm
i hv to knw abt Schedule n Non-schedule bank and abt the diffrence b/w them. Reply
1.
Mukul Sharma Says:
Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. Non-scheduled bank in India means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank. Reply
44.
MAHESH SHANTHAPPA Says:
September 28, 2011 at 4:27 pm
Hey Nice info very simple to understand Reply
1.
Mukul Sharma Says:
Hi Mahesh, Thanks for your appreciation. Reply
45.
john Says:
copy paste the above text in google translate to hindi..u will understand..re Reply
46.
ANKIT Says:
I WANT MEA IN SIMPLE ENGLISGPO RATENING OF RE Reply
47.
Guddu Bisht Says:
why are the earthquick effect the stock market Reply
48.
praveenkumar Says:
September 18, 2011 at 2:55 am
CRR calculated as a percentage of what? Reply
1.
sampathu Says:
CRR wii be calculated on the banks FD. The percentage will be between 3% to 20%. Reply
49.
shraddha Says:
then wat is the difference between bank rate and the repos?? Reply
1.
sampathu Says:
for example present repo rate is 6% bank rate is 10% and above Reply
1.
shishira Says:
in repo RBI provides funds to only banks .bank rate the rate at which central bank of any country provides funds to Financial institutions that may nt be banks
50.
Abhijit Says:
Hello Aditya Sharmaji, You have rightly explained that Repo rate is for short term lending and Bank rate is for long term lending by RBI. However, could you shed light on what period is considered short term by RBI ( is it like 3 months, 6 months, etc ?) and what period is long term as per RBI. Is there a fixed rule about that? Also, I want to ask as to how RBI decides what amount of loan is to be disbursed to which Bank under Repo or Bank rate ? as different Banks have different requirements as well as size of business. Like if a commercial bank decides to grant loan to a customer it is a commercial decision of that Bank as to whom to Grant the loan and at which rate ? How does RBI take this decision regarding lending money to Banks under Repo or Bank rate ? Reply
51.
mridula Says:
very clear definitions Reply
52.
jitendra Says:
SIR PLZ SEND ME AS MOSTLY ASKED IN BANKING EXAM Reply
53.
Satyabrat padhi Says:
Dear Sir, please give me an example how to calculate SENSEX? Reply
1.
sampathu Says:
Mr.Satyabrat. 1 point is equal to 300 crore 1000 point = 3 lakh crore
Reply
54.
gnosiofera Says:
Hi Mukul, So, the total reserve that a commercial banks would need to maintain would be SLR + CRR = 30% as in the present case. Which means the the commercial banks can use on 70% of NDTL for loans and other financial transactions? Thank you, Reply
55.
Prem Says:
August 28, 2011 at 2:46 pm
Hello Sir, I Am a science graduate and has passes exam gramin bank clerks examination. I want to know that what should i prepare for the interview ? As i am not familiar with the detailed of it and commerce and banking. Reply
56.
sonu Says:
August 28, 2011 at 2:28 pm
sir can u suggest me for which book is better for ibps cmmon written exam for clerk? and as i m in b.tech 4th year is this god for me to join bank sector? Reply
57.
Preeti Sharma Says:
August 20, 2011 at 3:12 am
sir please suggest me a book for G.K in reference 2 BANKING SECTOR for COMMON WRITTEN EXAM by IBPS Reply
58.
Preeti Sharma Says:
August 20, 2011 at 3:06 am
sir plz recommend me book for the info on banking sector as i m going 2 give C.W.E exam so G.K with spc. reference 2 banking sector is important 4 me. Reply
59.
Dharmpal Mandia Choudhary Says:
August 19, 2011 at 7:33 pm
dear sir, plz elaborate the function of PLR and tell how it effects on bank interest rates. and what is the basic behind fixing the rates as rates are of two types 1. bank receives from consumers and bank paye to consumers. much awaiting . Reply
1.
Mukul Sharma Says:
August 22, 2011 at 11:29 am
The basic function of PLR is to set the benchmark to the interest rates actually charged to the customer. So a home loan may be charged at PLR + X%, whereas car loan may charged at PLR + Y%. The riskier the loan, higher is the addition to the PLR. The basis of fixing the rates that bank receives and gives to the customer is the profit margin i.e. the difference between the two. If the bank charges 15% for loan it gives and gives 10% for the deposits it takes, the profit is 6%. The actual rates charged will depends upon the profit the bank wants to earn which will again depend upon the existing industry scenario, rates that competitors are charging etc. Reply
1.
pankaj chouksey Says:
very nicely explained sir,
2.
Mukul Sharma Says:
August 22, 2011 at 11:29 am
The basic function of PLR is to set the benchmark to the interest rates actually charged to the customer. So a home loan may be charged at PLR + X%, whereas car loan may charged at PLR + Y%. The riskier the loan, higher is the addition to the PLR. The basis of fixing the rates that bank receives and gives to the customer is the profit margin i.e. the difference between the two. If the bank charges 15% for loan it gives and gives 10% for the deposits it takes, the profit is 6%. The actual rates charged will depends upon the profit the bank wants to earn which will again depend upon the existing industry scenario, rates that competitors are charging etc. Reply
60.
Anil Patel Says:
August 9, 2011 at 4:19 pm
what is ther defination of repo rate, reverse reporate, marginal rate ,call rate, bank rate , crr, slr, non slr, Reply
1.
Anil Patel Says:
August 10, 2011 at 10:54 am
waht is marginal rate
Reply
1.
Mukul Sharma Says:
August 10, 2011 at 3:55 pm
Hi amit, Please specify which marginal rate you are asking about. Marginal rate of?
2.
Mukul Sharma Says:
August 10, 2011 at 3:56 pm
HI Anil, I have already given all the definitions Reply
3.
Anil Patel Says:
August 10, 2011 at 4:45 pm
where rbi is set marginal rate between repo rate & reverse reporate Reply
1.
Mukul Sharma Says:
August 10, 2011 at 9:56 pm
im sorry amit, i could not really get your question
61.
Rahul Says:
August 7, 2011 at 11:51 am
Sir pls elaborate the difference between bank rate and repo rate. Reply
1.
Mukul Sharma Says:
August 10, 2011 at 3:57 pm
Hi Rahul, I have already done that. Bank rate is a longer term rate at which RBI lends liquidity to the banks, whereas repo rate is a rate for short term borrowings of the banks from the RBI. Bank rate is more of an indicative rate. Reply
62.
Rahul Says:
August 7, 2011 at 11:48 am
Sir pls elaborate the difference of Bank Rate and Repo Rate Reply
63.
Cigarettes Buy Online Says:
August 5, 2011 at 5:11 am
7. I like the helpful info you provide in your articles. Ill bookmark your weblog and check again here regularly. I am quite certain I will learn many new stuff right here! Good luck for the next! Reply
64.
vimax enlargement pills Says:
August 4, 2011 at 10:36 pm
59. Thanks for another informative web site. Where else could I get that type of information written in such a perfect way? I have a project that Im just now working on, and I have been on the look out for such information. Reply
65.
proactol in stores Says:
August 2, 2011 at 5:26 am
12. Hello There. I found your blog using msn. This is a really well written article. I will make sure to bookmark it and come back to read more of your useful information. Thanks for the post. Ill certainly comeback. Reply
66.
vineet kushwaha Says:
July 13, 2011 at 12:05 pm
Hi, From the explainations it is clear that whether RBI increases the bank rate,repo rate or the reverse repo rate all act as a tool to decrease liquidity and control inflation.So how does RBI chooses which one to use? Reply
1.
Aditya sharma Says:
July 13, 2011 at 9:07 pm
it depends upon the situations but mostly repo rate plays an important role because if RBI increases it then banks have to pay more to RBI.. since both bank rates and reverse repo rate are related with repo rate then it is an important tool. Reply
67.
Neeraj Says:
July 9, 2011 at 11:51 pm
What is CRR and Bank Rate? Reply
1.
Aditya sharma Says:
July 16, 2011 at 2:25 pm
dear neeraj, CRR means CASH RESERVE RATIO as u see name clears itself that it is related with reserve. every bank has to keep a minimum amount of cash with R.B.I.Present CRR is 6%.This has do be done to avoid emergency conditions in the banks. while bank rate is a rate at which bank give credit to needy..current bank rate is 6%,also if r.b.i wants to increase the liquidity in the market it will decrease the bank rate and vice a versa means there is an indirectly proportional relationship.. also i have explained bank rate in reply section of this web page please go see thatthanx Reply
68.
Aditya sharma Says:
July 6, 2011 at 1:06 pm
what is exact difference between bank rate and repo rate? give me a mathematical relationship between both of them Reply
1.
Aditya sharma Says:
July 16, 2011 at 7:23 pm
what is the difference between deposit rate and reserve repo rate Reply
1.
aditya sharma Says:
July 21, 2011 at 12:29 pm
thanx Mukul sir for your response to me Aditya Sharma
2.
Mukul Sharma Says:
July 21, 2011 at 1:44 pm
You are welcome. Keep the knowledge express going
69.
priya Says:
June 28, 2011 at 2:36 pm
diff b/w repo rate n bank rate z nt very clear
Reply
1.
Aditya sharma Says:
July 13, 2011 at 12:12 pm
repo rate is the rate at which banks borrow money from the R.B.I and repo rate is greater than reserve repo rate(it the rate at which R.B.I takes money from banks thats why the word reverse is used means reverse of the repo rate) now repo rate is 7.50% and resrve repo rate is 6.50% and bank rate can b understand as bank rate =repo rate+banks interest which it charges from the customer e.g if x bank charges 8% from u that means bank has 6.50+1.50 % totalbecause if bank takes same amount of interest from u which it takes from r.b.i then it has no profit.may b this will help u Reply
1.
Janu Says:
July 15, 2011 at 7:16 pm
Thanks a lot aditya.. Ur explanation is superb..
2.
Nimesh Says:
today Bank rate is 6.00% and Repo rate is 8.50%Justify
70.
Akshay Chheda Says:
June 22, 2011 at 2:45 pm
Kya samjaya hai yaar..tusi gr88 hothanx Reply
1.
Mukul Sharma Says:
July 21, 2011 at 1:48 pm
Thanks. Im flattered. Reply
71.
rakesh Says:
June 21, 2011 at 6:01 pm
Both bank rate and repo rate mean same ? Reply
1.
Aditya sharma Says:
July 13, 2011 at 9:11 pm
no both are not same repo rate is sub element of bank rate in prefrence with banks.. Reply
72.
pia Says:
June 20, 2011 at 8:40 pm
sir i want to know about what is the effect of increase or decrease of repo rate, reverse repo rate, and crr on indian economy and inflation ? Reply
1.
Aditya sharma Says:
July 16, 2011 at 7:21 pm
dear pia, repo rate is very important term when it increases banks have to pay more to r.b.i when they take money from itso as we know if repo rate increases then bank rate also increases..so we the customer has to pay more to bank and when decreases then vice a versa in case of reserve repo rate if it increases then its good for the banks because r.b.i give more to bank on that condition but it is less then repo rate as all these things are contorled by r.b.i one important thing is that repo rate and bank rate are said to be same in some conditions but the difference is that repo rate are short term loans and bank rate are for long term. if crr increases then banks have to make more cash reserve with r.b.i so if in that condition banks will lend less.
Reply
1.
Mukul Sharma Says:
July 21, 2011 at 10:53 am
Thanks Aditya, for taking pains to give such good explanations.
73.
Arthi Says:
June 17, 2011 at 9:18 am
sir, i want to know the present rates for BANK, CLR, SLR , REPO RATE, REVERSE REPO RATE Reply
1.
kavir Says:
June 21, 2011 at 12:07 pm
go to RBI website all the rates are radially available Reply
2.
Aditya sharma Says:
July 13, 2011 at 9:20 pm
present bank rate is 6%, and its not CLR its CRR means CASH RESERVE RATIO which is 6 %(R.B.I charges it between 3 and 15%), SLR is 24%, REPO RATE is 7.50% REVERSE REPO RATE is 6.50% Reply
1.
aditya sharma Says:
August 11, 2011 at 2:47 pm
now repo rate and reserve repo rates are changed both are increased with 0.5% repo rate is 8% and reserve repo rate is 7%
2.
Marie Sharma Aroquia Dasse Says:
Now Repo Rate is 8.25% and Reverse Repo Rate is 7.25%.
3.
RDP Says:
Now Repo rate is 8.5% and Reverse repo rate is 7.5%
74.
sahar Says:
June 15, 2011 at 10:03 pm
i want to know that when do banks opt for repo and call? i know that repo is borrowing of money from a bank against government securities and call is unsecuritized borrowing i.e. no collateral is kept against borrowed money. is it like banks go for call borrowing to meet crr requirement and repo to meet slr requirement on a daily basis? thankyou. Reply
75.
Himanshi Says:
May 31, 2011 at 8:46 pm
Hello sir, I wants to know that, all these rates change rapidly, or monthly. Can you advise the correct rates for all above terms. Reply
1.
Mukul Sharma Says:
June 7, 2011 at 7:14 pm
Dear Himanshi, These rates are under review in every quaterly monetary policy of the rbi. These may or may not be changed depending upon the current monetary situation in the economy Reply
76.
subha Says:
May 29, 2011 at 3:58 pm
what does capital adequecy ratio mean. Reply
1.
Mukul Sharma Says:
June 7, 2011 at 7:17 pm
Hi Subha, I will explain this concept via a new post. So have a look at that. Reply
77.
subha Says:
May 29, 2011 at 3:37 pm
sir plz tell me how the rates( repo,rrr crr etc)are calculated?
Reply
1.
kavir Says:
June 21, 2011 at 12:10 pm
this all rates calculated by taking in to consideration various economic factors such as InflATION, gdp etc Reply
78.
mahesh kumar Says:
May 23, 2011 at 9:20 pm
Pl send me definitions of Repo rate,reverse repo rate,Bank rate,CRR,SLR andPLR And their current rates and also curret rate of SLR BR CRR PLR Reply
79.
mahesh kumar Says:
May 23, 2011 at 9:16 pm
I dont knw the meaning of bank rate & repo rate wil u calrify it
Reply
1.
Mukul Sharma Says:
May 26, 2011 at 10:22 am
Mahesh i have already explained the meaning of both, have a look, if u still dont understand then tell me the specific portion u have diffculty in Reply
1.
Aditya sharma Says:
July 16, 2011 at 7:26 pm
bank rates are for long terms and repo rates are for short term
80.
Jignesh rathod Says:
May 16, 2011 at 11:05 pm
Pl send me definitions of Repo rate,reverse repo rate,Bank rate,CRR,SLR andPLR And their current rates Reply
1.
Mukul Sharma Says:
May 20, 2011 at 10:24 am
All these rates are given on the site. Reply
81.
Meenakshi V Says:
May 13, 2011 at 8:37 am
Please provide Answers to my Query. Reply
1.
May 13, 2011 at 11:47 pm
See our post on Highlights of RBI Monetary policy for 2011-12 in http://ecofinsurge.blogspot.com/2011/05/rbi-unmoved-by-pointers-to-moderating.html Reply
82.
Arvind Says:
May 3, 2011 at 5:11 pm
Repo rate & bank rate difference is not clear.Why RBI should lend money if banks does not want to borrow? Is RBI force fully lends money? Also pl elaboreate how inflation is controlled by chaning repo & rev.repo rate?Is not possible to contol Inflation by controlling repo rate only.And also Is not possible to contol inflation by controlling only SLR as it also contols the liquidity in the mkt. Prently we hear that there is a liquidity crunch in the mkt ,then why inflation is increasing? Pl elaborate Thanks Arvind Z modi Reply
1.
sunny Says:
May 10, 2011 at 12:28 am
Banks need money for daily transactions so when they want more funds or loans to facilitate the end customer they go to RBI, They borrow loans for short period of time , the interest at which the RBI charges the bank is called Repo rate, Think this of a situation where you really are in a urgency of money and willing to pay any interest rate to the issuer for short term. Bank rate or the discount rate is also the same but the duration to pay back the money to RBI is a bit longer. Currently the Repo rate is 7.25% and Bank rate is 6%. Reply
2.
Mukul Sharma Says:
May 20, 2011 at 10:37 am
Nice questions Arvind. Sunny has already answered the first part of your question so il quickly move on to the second part. Usage of repo and reverse repo is done on the assumption that the inflation is due to the fact that people are demanding a lot of goods because they have too much money in their hands. If you want to control inflation, you have to reduce the amount of money in peoples hands so they would slow down their spending and demand for goods and help in controlling prices. Repo and Reverse repo basically reflect the cost of borrowing money from RBI for the banks. Now money is circulated in the systems mainly by the banks. If you increase their cost of borrowing money, they would pass on this cost to the borrowing consumer in the form of home loans, car loans etc. and the comsumer would lessen his demand for funds which will have an impact on the overall prices in the economy. I hope this makes it clear. Increasing SLR would mean that you are actually diverting bank funds away from the system, towards government securities. On the other hand, CRR makes the funds more costly. So the money remains in the system, although at a higher rate. This is why CRR is used more often than SLR in Monetary Policies. Inflation right now is increasing as it is a supply side inflation rather than demand-led inflation. Your question is very valid because, as against the popular opinion, it is not due to too much demand for commodities that the price is rising, but supply bottlenecks of agricultural commodities and the global rise in the price of industrial commodities, the reasons for which are very controversial and complex. This is the reason why despite regular hike in the borrowing rates, inflation is not coming under control. Reply
1.
pravin jude Says:
June 13, 2011 at 4:53 pm
nice explaination>>> rbi behave like surgon who give treatment to patient irrespective of cause of disease
2.
kavir Says:
June 21, 2011 at 12:15 pm
nice explanation
3.
sachin Says:
July 1, 2011 at 11:09 am
To the Point Great Explanation by Mukul .
4.
Subodh Says:
Good One.
83.
Gururaja Holla.R Says:
April 13, 2011 at 11:48 am
Whether Repo Rate and Bank Rate are one and the same. Reply
1.
Ajay Dwivedi Says:
May 3, 2011 at 11:05 am
No Repo rate is a rate on which bank borrow the money from RBI. Bank rate is a rate on which RBI lend to money to other bank and financial istitutions. Reply
84.
Soumyajit Says:
April 8, 2011 at 1:09 pm
Nice module. thnx a lot. Reply
1.
Mukul Sharma Says:
May 20, 2011 at 10:38 am
You are welcome.
Reply
85.
Soumyajit Says:
April 8, 2011 at 1:09 pm
Nice module Reply
86.
JAY PRAVIN BOHARA Says:
March 19, 2011 at 2:08 pm
Sir pls give us brief idea about fiscal deficit Reply
1.
Ravi Teja Says:
May 3, 2011 at 9:43 am
fiscal deficit is the difference between expected revenue and expenditure.In this situation the expenditure is greater then the revenue.The governments borrow the deficit amount from the public or world bank or any other longterm sources of funds. Reply
87.
Sujeet Mishra Says:
March 4, 2011 at 12:16 pm
What is the basis of determining dearnss allowance payable to employees in India? Reply
88.
ram kumar yadav Says:
Dear sir Please tell me current bank rate,SLR,CRR,R.REPO, REPO Reply
1.
Thanks Reply
89.
Dear sir Please send me current bank rate,SLR,CRR,R.REPO, REPO Reply
1.
DEEPAK SARAF Says:
March 26, 2011 at 1:02 am
current bank rate = 6% SLR = 24% CRR = 6% R.REPO = 5.5% REPO = 6.5% Reply
1.
ashish koshta Says:
August 8, 2011 at 11:55 pm
Hi. Current Repo rate is 7.50% Reverse Repo Rate is 6.50 % SLR 24 Bank rate is 6 %
Ashish koshta 09329385750
2.
Mukul Sharma Says:
August 10, 2011 at 3:56 pm
Thanks Ashish for the help.
3.
Marie Sharma Aroquia Dasse Says:
Curret Rate current bank rate = 6% SLR = 24% CRR = 6% R.REPO = 7.25% REPO = 8.25%
90.
Yatish Says:
Dear sir Please send me current bank rate,SLR,CRR,R.REPO, REPO .i have bank p.o exam
Reply
1.
S. P. Saxena Says:
Bank Rate : @ 6% SLR : @ 24% CRR : @ 6% R. Repo : 5.50% REPO : 6.50% Reply
91.
damoder Says:
Define PLR and Bank rate in brief with example Reply
1.
DEEPAK SARAF Says:
March 26, 2011 at 1:12 am
PLR is stands for prime lending rate it is also called as prime rate, it is the rate at which a commercial banks lending the money to its customers. Its vary bank to bank.
Bank rate is the rate at which the central bank of any economy lending the money to the commercial bank for a long term perspective. ex:- RBI giving the money to the SBI for long term right now in India bank rate is 6%. Reply
92.
damoder Says:
define PLR and bank rate Reply
93.
anish Says:
feeling like now i have also knowledge about finance Reply
94.
sweety Says:
can u pls xplain why US doesnt have free trade agreement with india? thanks in advance Reply
95.
sweety kuriakose Says:
why we use Wholesale price index for the calculation of inflation? Reply
96.
sandhya Says:
January 18, 2011 at 10:42 pm
hello sir plz send present rapo rate bcz i have bank exam Reply
1.
sunil kumar Says:
January 27, 2011 at 10:07 am
rapo 5.75 br 7.25 call 9991318415 Reply
2.
DEEPAK SARAF Says:
March 26, 2011 at 1:15 am
current bank rate = 6% SLR = 24% CRR = 6% R.REPO = 5.5% REPO = 6.5% Reply
97.
sandhya Says:
January 18, 2011 at 10:39 pm
hello sir plz present rapo rate bcz i have bank exam Reply
98.
vimal singh Says:
what is PLR, related to RBI? Thanks in advance.. Reply
99.
shindhu Says:
sir,can u plz tell me how to control reverse repo rate within 2days becoz i have bank exam
Reply
100.
mamraj Says:
what is slr crr in ?detais Reply
101.
mamraj Says:
what is real meaning of slr,crr according to indian econmy? Reply
102.
hardik Says:
will u explain the difference between bank rate and repo rate Reply
1.
The SURGE Research Support Says:
Definitions from EcoFin-SURGE Terminology section: Bank Rate is that rate at which the RBI lends overnight money to commercial banks. Repo/Reverse Repo Rate: Repo rate is the rate at which the RBI buys government securities from the market to infuse liquidity in the system. Reverse repo rate is the rate at which the RBI absorbs excess bank funds by selling government securities in the market. If liquidity is abundant in the system, then reverse repo becomes the key policy rate, but when liquidity is scarce and banks borrow from RBI, the repo rate is the policy rate. A cut in repo rate is a signal to banks to pare their lending and deposit rates but its effectiveness depends on liquidity in the system. The lender or buyer in a Repo is entitled to receive compensation for use of funds provided to the counterparty. Effectively the seller of the security borrows money for a period of time (Repo period) at a particular rate of interest mutually agreed with the buyer of the security who has lent the funds to the seller. The rate of interest agreed upon is called the Repo rate. The Repo rate is negotiated by the counterparties independently of the coupon rate or rates of the underlying securities and is influenced by overall money market conditions. The Repo/Reverse Repo transaction can only be done at Mumbai between parties approved by RBI and in securities as approved by RBI (Treasury Bills, Central/State Govt securities). Uses of Repo It helps banks to invest surplus cash. It helps investor achieve money market returns with sovereign risk. It helps borrower to raise funds at better rates. An SLR surplus and CRR deficit bank can use the Repo deals as a convenient way of adjusting SLR/CRR positions simultaneously. RBI uses Repo and Reverse repo as instruments for liquidity adjustment in the system. Reply
103.
raghavan Says:
i need more like this Reply
104.
Mayank Sinha Says:
thnx sir can u pls explain the term credit control nd credit creation.. Reply
105.
Mayank Sinha Says:
thnx a lot sir.. can u please explain the term credit control nd credit creation. Reply
106.
paromita Says:
hello sir, can you pls brief me about the proper definition of repo rate and reverse repo rate and their impact in economy?..it will be very heplfull to me for my assignment if u answer my doudts with in 14th of nov. Thank you. Reply
1.
raj naidu Says:
March 10, 2011 at 12:43 am
hi paromita, see your question is not so easy as well not so hard ,if you read carefully all the defination hich above mension you will come to know accordiglly, when a bank face any problem regarding lack of liquidity they borrows money from the RBI this rate is call as repo rate , in the same opposite mnner if RBI use to borrow monney from the banks this rate is call as reverse reo rate THE IMPACT OF ECONOMY,if rbi increase the reo rate as simple as banks will get money in higher price i this propostional they will distribue the loan in higher rate which impact end of the day a common humen being Reply
107.
paromita Says:
Hello sir can u pls sent me the proper definition of repo rate and reverse repo rate? it will be of great help for my assignment if u kindly answer me. Thank you.
Reply
108.
kaamini Says:
this is very useful for bank exam. and sir please explain the cause of inflation in india? Reply
109.
farah Says:
is repo and reserve repo rate applicable only for scheduled commercial banks? Reply
110.
manoj kumar raushan patna Says:
Im extreamly pleasd with your answers. Reply
111.
Subhash Says:
October 24, 2010 at 12:48 pm
Thanks for making me understand about all these banking terms.This helped me to know why RBI increase or decrease these rates. Reply
112.
Subhash Says:
October 24, 2010 at 12:46 pm
Thanks for making me understand about all these banking terms.This helped me to know RBI increase or decrease these rates. Reply
113.
yogendra Says:
very nice collection of basic banking terminology. Thank you Reply
114.
sukesh Says:
August 21, 2010 at 6:46 pm
Dear sir, this is a good sort of analysis that we public services aspirants do need. thanks. Reply
115.
Mehul Says:
August 15, 2010 at 11:19 pm
Thanxs to all..I am sure that this is best site for understanding banking basic concepts.. Reply
116.
Nagaraj Says:
July 28, 2010 at 12:26 am
Dear Sir, It is really nice to read your definition. IT helps me to improve my economic knowledge. Thanks for your good work Reply
1.
nithin salian Says:
July 28, 2010 at 10:40 am
Dear Nagraj.. I want to know about the same and can u mail me the definition which u got thx Reply
117.
ratin Says:
July 5, 2010 at 4:22 pm
hello, I read the definitions for CRR and SLR i am not very clear about the need for both CRR and SLR. why not a single limit. the only reasoning i can understand is that CRR is used as a risk deposit by RBI and SLR is used to bring liquidity to the G-Sec market(if thats the case then why should banks be forced to bring liquidity to Indian G-Sec market). I also have another query. 6% of deposits go for CRR maintainace. that leaves 94% of funds with the bank. of this 25% need to go for SLR maintainance. that means another 23.5% of the funds. that means only 70.5% of funds are left with banks to invest in the market. is this calculation correct? thanks for providing a wonderful explaination to all these terms. regards RATIN Reply
118.
harshit Says:
June 27, 2010 at 12:03 am
sir it was interesting to read this article. but i have a question, it would be great if you can explain it. why is there a difference between repo rate and reverse repo rate, and had there been any such instance when they were equal or inverted Reply
119.
jitendra jain Says:
June 21, 2010 at 4:21 pm
very concrete and precise but covered all the significant aspects. sir, one question as you told about CRR and SLR but which rate a bank first has to deduct. Reply
1.
jitedra Says:
August 23, 2010 at 4:20 pm
sir one more question please clear some more terminologies like IDR, FDR, ADR, and SDR this all are vary confusing.
Reply
120.
PRADIP DAS Says:
May 30, 2010 at 7:38 am
Please describe what is bank rate, repo rate, CRR, SLR, Reverse repo rate and their present rate in layman language. Reply
121.
nayana Says:
May 28, 2010 at 1:40 pm
hello can u explain me about the GDR Reply
122.
m.subramanian Says:
May 24, 2010 at 10:55 am
please expand and explain YoY. Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:06 pm
YOY stands for Year-On-Year. It means the comparison of a particular figure as on the same time during last year to the same time this year. For eg. the yield on YOY means ( while talking as on 31/3/20100 , the yield as on 31/3/2009 and 31/3/2010 Aare compared and the growth in % as on 31/3/2010 is spelt out with 31/3/2009 as base. Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:10 pm
Please read as 31/3/2010, not as 20100. It is a mistake
123.
shishir kumar Says:
May 1, 2010 at 11:00 pm
very few people are knowing about all thease definitions, so it is very usefull for those who is preparing for interview or bank exams. Reply
124.
Nitin Says:
April 22, 2010 at 12:53 am
This information is really helpful, specially for those who are preparing for banking exams. Thank you very much for provinding such wonderful information in such a easy words. Reply
125.
Mahima Rajput Says:
April 20, 2010 at 8:51 pm
Dear Sir, Please explain me difference between bank rate and repo rate thank you Reply
1.
shimil Says:
April 21, 2010 at 6:25 pm
While repo rate is a short-term measure, i.e. applicable to short-term loans and used for controlling the amount of money in the market, bank rate is a long-term measure and is governed by the long-term monetary policies of the governing bank concerned. Reply
2.
samir srivastav Says:
July 2, 2011 at 6:18 pm
samir says, bank rate is a discount rate while repo rate is a automatic taxable rate. Reply
126.
Krishna Rakesh Says:
April 19, 2010 at 9:02 am
The information in the site was very useful for fundementals Reply
127.
jagadeesh B Says:
April 4, 2010 at 4:08 pm
i really satisfied, about this information Reply
128.
ashish Says:
April 2, 2010 at 2:40 pm
Thx sir
Reply
129.
Ravish Kumar Says:
March 8, 2010 at 11:00 pm
Dear Sir as per my knowledge CRR maitains liquidity but if we see Reverse Repo Rate it also maintains liquidity because RBI can demand for money to any bank. Then where the difference lies between these two. Thanks & Regards Reply
1.
sagar Says:
March 26, 2010 at 1:56 pm
the difference is that in CRR banks have to park their certain amount of money in RBI while in Reverse repo banks are purchasing back their securities from RBI at that rate so the difference is the securities banks have to buy or sell in repo rate or reverse rapo rate Reply
1.
Vikrant Says:
Is it like
SLR Banks park their Funds with RBI and get G Secs and Mandatory Secs later these secs are purchased back by RBI (thats why it is called Repurchase option (REPO) ? I was always under impression tht it works like this. Is this true? Also i thought the funda is exactly reversed in Reverse Repo context.
2.
Kuldeep Says:
June 29, 2010 at 9:35 pm
i have little more to add to what sagar said, CRR is a mandate which has to be followed by the banks whereas Reverse Repo Rate is an option available with the banks, if the want the can park their funds with RBI, if the dont want the are not bound to do so it makes a clear difference between both of them. Reply
1.
Kuldeep Says:
June 29, 2010 at 10:40 pm
hey by mistake t typed it the want the can park.its they want they can park their funds with RBI
130.
shyoji yadav Says:
March 3, 2010 at 11:54 am
sir,tall me about differant rate Reply
131.
dileeprocks Says:
Superb analysation,but it would have been better if u have explained more clearly the difference of CLR and SLR Reply
132.
Ghanshyam Says:
slr and crr are ratio of something. so pls specify it. donnt post incomplete knowledge. Reply
133.
dashmesh Says:
thanx for all the information.which is very helpful for me
Reply
134.
suhana Says:
what is security analysis.. Reply
135.
ashutosh goyal Says:
January 31, 2010 at 12:09 pm
what is the difference between repo rate and bank rate . since there is no clear line of difference anywhere.what is crr. it has been defined differently at different places. Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:41 pm
No confusion in respect of CRR. Presently it is 6%. That means banks have to keep 6% of their demand and term liabilities ( ie the deposits from the public) in the form of cash with RBI. The money kept in the banks own currency chest will be counted as having kept with RBI for CRR. That means to this extend banks cant advance as funds would have been blocked with RBI.During inflation, RBI increases CRR so that money will be sucked from the system (
ie banks ) and net effect banks willnot have funds to that extend to lend and in turn the money available with the public will be less. Reply
136.
neeraj Says:
DEAR SIR, I WANT TO GET GOOD KNOWLEDGE OF BANKING SECTOR HOW CAN I GOT IT IF YOU HAVE SOME DATA PLEASE SEND ME VIA MAIL I ALWAYS BE THANKFUL TO YOU Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:43 pm
Read Handbook of Banking Information by N S Toor Reply
137.
sridhar Says:
Dear sir,
Please clarify me on (i) If a banker borrows funds from RBI, what rate of Interest they have to pay RBI @ The bank rate (6.00%) OR @ The Reverse Repo Rate (4.75%) (ii) How the bank rate differs from Repo rate and reverse Repo rate Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:44 pm
Reverse Repo is a short term advance, while bank rate affects the long term lending Reply
138.
sridhar Says:
Dear Sir I want to thank you for the instant ready reference on the Very important terms Banking System. Thank you. Reply
139.
Bineet Says:
Dear Sir, As I understand one of the main purpose of maintaining CRR and SLR is to separate some of the banks asset completely free of charges as the protection to deposit holders. Just wondering on following issues: 1. Can a commercial bank pledge its SLR securities to other commercial bank to secure higher inter-bank limit or to take money ( say for 90 days or 180 days) from other commercial bank? In this case , are those pledged securities counted while determining adequacy as far as SLR requirements are concerned? 2. Is it required, under any law, to keep the SLR securities free of any charges? Can you provide us the specific link to where I can look at such regulation? Hope I am not bothering you. Thank You. Reply
140.
Arjunavadivel Says:
this explanation is very useful for common man because very simple while easy udrstanding words. some sources are not explein like this, we cotinue our paths on indian monetary tools. Reply
141.
mehrul Says:
respected sir my question is dat. what is the effect of subprime crisis on indian banking industry? Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:46 pm
Very little, negligent Reply
142.
Anonymous Says:
I am thankful to you for providing me with such a coherent explanation of the terms of finance which need to be understood by all citizens of the country who transact with the bank. Reply
1.
It is indeed encouraging to see such lucis explanation of finance/economy terms! Your readers may be interested in a concise summary of RBIs latest policy and economy review posted on our site. They can also use our Monthly bulletin to get compilation of data series on the Indian economy for every month. Reply
143.
shikha tyagi Says:
dear sir, thanks a lot! i want 2 know about SLR in detail. plz also tell what paper money means Reply
1.
Anonymous Says:
Paper money means the notes that we use nowadays. It differs from plastic money (debit cards, credit cards) because plastic money needs to be converted into paper money to be brought into use while paper money can be directly used in the market to buy commodities Reply
2.
kumar Says:
March 31, 2011 at 1:20 am
repo rate is 6.75 and reverse repo rate is 5.75 Reply
144.
Priti Says:
hellonsir,thanks alot. Reply
145.
MINAKSHI Says:
hello sir,thanks for making me clear the meaning of all these important terms,can u just make me clear the difference between bank rate, prime lending rate and repo rate.Please just give me an overview about sub-prime crisis,what exactly the sub prime crisis is? Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:48 pm
Prime lending rate is fixed by Commercial Banks, while bank rate , repo rate and reverse repo rate are announced by RBI Reply
146.
lovika Says:
sir/mam will u explain the difference between bank rate and repo rate Reply
147.
lijo Says:
nice explanantion.. thnx! Reply
148.
Suchita Says:
Dear sir, Thank u sir. Reply
149.
subair mv Says:
Thanks sir. Reply
150.
Yasmeen Says:
thank you for your information it was very informative i have one request to you regarding providing as many as information on fifnacial terms if possible as i am an finance student so i want to have in depth knowledege regarding finance Reply
151.
Ashima Mahajan Says:
thanx 4 info
Reply
152.
shashi Says:
i would like to thanks for this knowledge Reply
153.
someshwar Says:
i like thyis side because we get full knowladge Reply
154.
Pradeep Says:
July 15, 2009 at 10:56 am
Hello sir, I really very happy to find this site to ask my queries. Recently found this site while surfing.. Really happy tat many ppls here to answer my basic queries. Fine let me come to matter. I am very basics in share market. Dont even have 1% knowledge on buying the share, selling it, how to start, where to review, where to update and al such stuffs..
I request anyone to explain in basic way so tat many of pppl like me can understand abt this. hope some will reply on it. Thanks in advance. Regards, Pradeep Reply
1.
Anoop Says:
August 17, 2009 at 1:08 am
Dear Pradeep, I am really very happy that you are interested in knowing how share market works. But let me tell you one thing that there are no single books or any website which gives 100% information about share market. So, you will have to work hard to get information from different places and then convert it to your knowledge to capitalize in trading. Now, let me come to the point. You can contact to any brokerage firms agent who are engaged in Opening Demat a/c. They will make you aware about the basics of the share market. But do not believe 100% on them because they will make you to get opened demat a/c and then do trading for their brokerage and commission. Please do not start trading until and unless you know your Risk & Return profile and purpose of investment. First, do your need based assessment then start trading. Bye Bye.. Reply
155.
amrendra k Says:
July 13, 2009 at 10:52 pm
I promise to pay the bearer the sum of certain value of rupee is written on our rupee note where as on other hand coins also serve the same purpose as notes but such type of statement is not written on coin, kindly explain. Reply
156.
Prerna Says:
June 26, 2009 at 7:38 pm
sir/madam plz tell me abt the Nationalized banks.whts the actual the actual meaning of it???? and also the difference between banks and financial institutions???? plz reply soon Reply
1.
Mandar Says:
August 30, 2009 at 3:54 pm
hi,prerna.. as uve asked abt banks,its nationalization and financial institutes, i think first of all u should understand the difference betn bank and financial institutes. There are many big firms engaged in production and distribution. These firms to start with needs big amts and the question arises from where to source the funds. These firms collects it from various sources like banks, mutual funds, loans, securities and share capital.
The organizations engaged in suppling funds to these firms, collectively called as financial institutes. Banking sector is one of the long term loan providers for these firms. one of the main differenc betn the bank and other fin.insti. is band provides fixed rate of interest on the funds invested in it whereas others includes more risk and more rate of return. nationalization of bank is done by the central govt. in interest of nation. in nation banks come under the control of govt. After the independence so far 21 banks have been nationalize. Reply
157.
divya shukla Says:
June 11, 2009 at 7:49 pm
dear sir, i want get recent data on SLR ,BRR, CRR, RR, Recent GDP CONTRIBUTION IN NNPAT FC NNP FCIN RECENT %INCRESE IN POPULATION ALL DATA OF INDIAN ECONOMY AS PER CPT(C.A) SYLABUS IF POSSIBLE SIR IT WILL BE UR SUPPORTIVE HELP FOR MY UPCOMING CPT EXAMITAION Reply
158.
Nitesh Says:
April 22, 2009 at 9:19 pm
Hi pankaj can u please give me a clear defination of inflation rate and how does it effect our economy. Reply
159.
raji Says:
April 10, 2009 at 8:19 pm
sir i want to know about the current CRR, SLR, REPO,REVERSE REPO RATE AND BANK RATE details Reply
1.
Tathagata Maiti Says:
June 1, 2009 at 12:55 pm
Hello Raji, Check out this link: http://www.rbi.org.in/home.aspx Reply
160.
arpan sharma Says:
March 27, 2009 at 9:31 pm
what is the difference between repo rate an bank rate , as in both cases RBI lends money and banks borrows,,the definition just distinguish each other ,as,in the repo as borrowing by bank and in case of bank rate as RBI lends so what is the difference Reply
161.
Simardeep Singh Says:
March 27, 2009 at 12:00 am
Sir, I just came across this blog and I think it is really wonderful. While going through all the comments in this thread, I just came across some definition of PLR by Pankaj. Well, I dont think it as correct. PLR Prime Lending Rate and it is setup by the bank management for each bank seperately and individually. All the other credit rates of the bank are based upon PLR only. Reply
1.
Mukul Sharma Says:
May 6, 2010 at 2:47 am
You are absolutely right Simardeep, thanks for the clarification Reply
162.
Rushi Says:
March 25, 2009 at 12:36 pm
Hi Everbody I Just want know the Treasury Bills what is 91 days, 364 & 182 Days. Reply
163.
Om Barnwal Says:
March 21, 2009 at 6:24 pm
Dear Sir Thank U So Much for these informations. Reply
164.
Sani Simon Ashuli Says:
March 18, 2009 at 9:01 pm
What is the latest figure of Bank rate,CRR,repo rate,reverse repo rate and SLR as recommended by RBI? Reply
1.
Dev Darak Says:
July 9, 2009 at 12:22 pm
Hello Sani Simon Ashuli, Check out this link: http://www.rbi.org.in/home.aspx Regards Reply
1.
NARAYANAN S Says:
May 26, 2010 at 6:54 pm
Bank rate 6% Repo Rate 5.25% Reverse Repo 3.75% CRR 6% SLR 25% All at present . To know these details, you can loginto RBIs website
165.
Raj Says:
March 10, 2009 at 8:33 am
Sir, thank u very much.While explain terminologis relate it with current affairsIt will be much helpful to us Reply
166.
saran Says:
March 9, 2009 at 12:40 pm
GOOD AFTERNOON, SIR 1. THE INTEREST RATE INCREASE WHEN BONDS PRICE DECREASE WHY.
2. INFLATION OR DEFLATION WHICH ONE IS FAVOUR FOR OUR ECONOMY Reply
1.
Mehul Says:
August 15, 2010 at 11:08 pm
Dear Saran, Please see the mini example, which give you more clarity in bond. Bond Currently Market price: Rs. 100 Interest: 8% Inflation 5% If Inflation is increased by 5%, means total 10% inflation, but interest on bond is same (8%), You get same amount, but value of money decrease, so bonds market price will be fall. Reply
167.
Ashutosh Kr. Singh "suryavansham" Says:
March 5, 2009 at 9:46 am
Dear Pankaj Sir Thnx for all the info. With reference to sensex I have a query what do you you mean by Weightage of company in the stock? second query How is BSE different from Nifty and which one is the most important if we are speaking in terms of impact on economy. Reply
168.
Sharad Jain Says:
March 2, 2009 at 12:57 pm
Sir/madam, i want to know relationship between repo rate, reverse rapo rate and inflation Reply
169.
Jivitha Says:
I want to know current rates of Repo, CRR and slr please help Reply
1.
Anoop Says:
August 17, 2009 at 1:27 am
Dear Jivitha, Please visit the RBI website to know the current rates. For now, you can use the below link. http://www.rbi.org.in/home.aspx Regards, Anoop
Reply
170.
poorti Says:
hey its a very rasy xplaination and it will surely help the students preparing for banks entrance thanx it helpd me in po interview Reply
171.
rohit bhura Says:
what are the present rates crr slr bank rate plr etc what is plri got confused with the defination given above i think it is the rate at which banks give big loans to its prime and creditworthy customers please explain about the the type of securities involved in slr Reply
172.
kavitha Says:
wonderful information site. sir i want to know the difference between public sector banks and private sector banks and on what basis they are seperated like that?
Reply
1.
Mandar Says:
August 30, 2009 at 4:04 pm
dear kavitha, Im glad to explain u diff. betn public sector and private sector bank. The most significant diff. lies in stake holding. in public sector bank govt. holds the maximum share of ownership. hence it is under control of govt. it works as per the govt. policies. whereas private banks there is no such rule of ownership and it works completely under the board of representatives of share holders i.e. board of directors. Reply
173.
Sourav Datta Says:
Again another small question. By the term rate here I think we mean interest rate. Am I right? Please oblige by answering. Reply
1.
Mukul Sharma Says:
May 6, 2010 at 2:49 am
yes of course sourav, it is interest rate Reply
174.
Sourav Datta Says:
Thank you for the information. But I have a small doubt regarding the definition of repo rate. Repo rate has been defined as Repo rate is the rate at which banks borrow funds from the RBI Can we say that Repo rate is the rate at which banks borrow money from the RBI Is there any difference between the words fund and money? Are the words fund and money used synonymosly here? Kindly oblige by clearing my doubt. Reply
175.
anjali Says:
January 22, 2009 at 12:43 pm
very good explanation. thanx coz i was searching desperately for exams. Reply
176.
pankaj Says:
Hi Dear, In polity: Federal: Means clear cut division of the power betweeen the centre and the states,only in extraordinary situation centre can interferes in state matters linke in the (USA). there is no any concept of concurrent list in the USA. Central: Like services of the CBI can be availed by the states also in the india as per the gravity of the crime/situation,Centre suo-moto can instigate CBI enquiry without any consent of state . Apart from this i dont see the any difference from polity point of view Reply
177.
amrendra k Says:
dear sir, In polity what is the difference between federal & central?Eg:-CBI FBI.Is the use of federal & central in these two cases has got any purpose as far as polity is concerned & can it make any difference? Kindly clear Reply
178.
S Sarkar & S Bose Says:
Your blog about Indian Economy is good. Thanks for letting us know about your blog and also give us the opportunity to share our website with you and your visitors. http://www.ecofin-surge.co.in is an endeavour to provide data support to anyone who is interested in tracking the trends in the Indian and Global Economy as well as Financial markets. The website offers a comprehensive collection of macro-economic and financial markets data, both Indian and International compiled from official websites of relevant countries. The website provides part of its collection of the basic data, free of cost, while, some other series like historical time-series and crucial rates and ratios or bond yields are estimated and provided at request. Reply
179.
S Sarkar & S Bose Says:
Your blog about Indian Economy is good. Thanks for letting us know about your blog and also give us the opportunity to share our website with you and your visitors. We would appreciate if you keep in touch with us in future. Thanks. The Surgers (For ecofin-surge) Reply
180.
pankaj Says:
January 20, 2009 at 12:49 pm
In india earlier there was no any agency to tackle,only terrorism related crimes but now it is there. Other intelligence agencies in india are theer to cover up all the other areas which are coverd by FBI( in brief) Reply
181.
pankaj Says:
January 20, 2009 at 12:44 pm
Difference between NIA and FBI NIA: 1-Main concern or you can say that only concern of it is to deal with terrorism or terror realted activities such as (Funding, training camps,recruiting people for terror related activities and so on .) in the states and in centre. 2-Have all the power of special court to procecute the accused of CrPc(as mention in the act) 3-For better cordination between among the states and between the states and union to deal with terror realted activities. Apart from this some other more powers are given.for detail please read the Act itself. FBI: 1-Against terrro attack 2-Against any foreign intelligence 3-Against cyber-based/High-technology based attack 4-Combat public corruption 5-Protecting civil rights 6-Transitional/national crime
7-major white-collor crime 8-Significant violent crime Reply
182.
S. Sarkar Says:
You can get lucid explanation of economic and finance terminology on our website http://www.ecofin-surge.co.in. You can also get data and indicators on the Indian and global economy and Financial markets. Reply
183.
amrendra k Says:
January 19, 2009 at 10:18 pm
dear sir, when there are so many intelligence agencies in our country then what is the need for NIA?How it resembles FBI of USA? Reply
184.
pankaj Says:
January 19, 2009 at 10:20 am
HI All, yes you can ask question from any field like [Geography ,polity,statistics,pub.ad.,psychology,history,current affairs,menatl ability,Biology(prelims),International relations etc.] I do not have much knowladege about chemistry so pleased pardon me for that . Reply
185.
amrendra k Says:
thank u for the valuable information about varrious banking terms.Can I have informations in other fields like geography, chemistry and more importantly current affairs Reply
186.
rohini Says:
thanks a lot for all d terminologies..dey were very helpful.keep giving more definitions so that we can be aware of such terms. Reply
187.
pankaj Says:
PLR and And loan system:
Hi You can read about the PLR (Is the percentage of amount left after deduction of CRR and SLR from the total liability of any bank) after this remaining amount(Say 100) is divided on the two parts,one part that right now 40% of the remaining amount is directed to sectors identified by the Government such as :marginal farmers,BPL,SSI,Sick industries etc. Reply
188.
pankaj Says:
Hi, Currency printting policy The Reserve Bank decides upon the volume and value of bank notes to be printed. The quantum of bank notes that needs to be printed broadly depends on the annual increase in bank notes required for circulation purposes, replacement of soiled notes and reserve requirements. Reply
189.
pankaj Says:
Hi jyoti .. yes banks use to get interest on SLR securities Reply
190.
pankaj Says:
Hi purushottam: CRR i have alredy explained u can read it and understand it what dose it mean. Answer:Increase in CRR leads to Sucking of money from market, so in that case banks increases their interest rate on lending. In other terms money becomes costlier to masses( This tool is used to curtail the inflation which occurs due to excessive demand).opposite happens when CRR is reduced by the government. Reply
191.
pankaj Says:
Hi guys sorry for not replying since long time.. i was bussy, so i hope so u people will forgive me .. Reply
192.
KUMAR SAURAV Says:
hw the co. comes with theit IPO n hw the price has been fixed of an IPO an give me the detailed information about IPOs. with regards kumar saurav Reply
193.
pradeep verma Says:
how many shares are listing in NSC and BSC?.pls provied detail. what is the mean share by back? Regards pradeep Reply
194.
Purushottam kumar Says:
I am very serious to know about in detail that how crr is going to affect our indian market. Reply
195.
amrendra k Says:
respected sir, mindblowing site,the nformation I information that I have gathered today regarding rr,rrr,crr,plr,cr was rare and could have spent months to gather. Thanks alot.
Reply
196.
GAJANAND KUMAWAT Says:
Thanx for the easy definations. regards, G.Kumawat Reply
197.
PRAVEEN SHARMA Says:
dear Sir, I want to study debt market in depth,i am not very knowledgeble person as far as debt mkt is concern,can you pls guide me some good books for same which can explain every thing in dtail. Reply
198.
Ali Usman Says:
hi sir i am a student of MBA final semester.i want to know the complete concept about SLR and
CRR. kindly if there is any article related to this plz send it to my e mail id. i have to present it in this weak. thanx Reply
199.
jyoti Says:
do banks get any intrest on SLR securities which they buy from RBI? Reply
200.
syed ubeid Says:
rbi cuts the crr, repo rate and slr. what is the impact of this action on consumers,business, capital markets and banks? Reply
201.
ramsankar shroff Says:
i want to know to till how many years the effect of financial crash wil be on the economy?is ther any any effect on india of the recession in japan ?plz let me know the answers.
Reply
202.
ramsankar shroff Says:
really i am very thankul to all because today i come to know about a lot about different banking related rates. Reply
203.
vipinbehl Says:
Dear Sir, I have a question that what is meaning of PLR, How it is related to Loan system. Kindly explain regarding SLR and How its work in system. Reply
204.
Manjunath Hegde Says:
Dear Sir/Madam,
I just want to what is present percentage of reverse repo rate? What difference between PSU (piblic Sector Units) Pct. Sector bank and Co-Op banks? Whatis E-Sops (employees stock option)? Please send me the reply if anybody knows it. regards, Manjunath Hegde 9860730197 Reply
205.
Amrita Says:
Thanx fot the explanation of REPO,Reverse REPO, CRR, SLR It is really helpful to understand the functioning of the same Thanks a lot ! Reply
206.
bhushan sahu, bhopal Says:
thanks 4 giveing ecofriendly, understandable and easy definitions of CRR,REPO RATE and SLR. Reply
207.
Dhiraj r raisane Says:
whats the reason behind financial crises arises in US & Global. Reply
208.
jayant sharma Says:
hello sir,iwant to know the basic differance between repo and bank rate and when both effect. Reply
209.
Ritesh Kumar Says:
Hi Pankaj, Thanks a lot for sharing such valuab;le information in simple and easy to understand language.. I want to know what are the fators on which RBI decides how much currency to Print. Do we follow Gold standard or sth. else ? Regards, Ritesh Kumar Reply
210.
sana Says:
October 26, 2008 at 11:54 am
nice site i was just searching for current rates of rbi when i come across this site good explanation of the ques given Reply
211.
Pankaj Says:
October 24, 2008 at 12:30 pm
Hi every body, if any body of u having any doubt related with any topic of G.S.(Any section), Public Administration, Psychology. please feel free to write me.i will be happy to assist you .incase any body wanted to contact me please write me panky2020@rediffmail.com Reply
212.
kulwant Says:
October 23, 2008 at 10:25 am
thanx 4 such easy and effective defitions Reply
213.
Pankaj Says:
October 22, 2008 at 11:13 am
Hi RomiBR- It is the rate at which the RBI lends the loan to other banks for long term against government securities. RR-Lending rate offered by the RBI to other banks for short term lending against the private securities. Reply
214.
Pankaj Says:
October 22, 2008 at 11:12 am
Hii Priyanka.. CRR-Is the percentage of amount deducted from the total libality of the bank and which should be kept in the liquid form with the bank(say total liability of bank is 100 and amount for CRR is fixed 5%,than Rs. 5 will be kept in the liquid form ),remainig amount will be Rs.95-/ SLR- it is the percentage(fixed by the RBI) of money(left after deduction of CRR) which is invested in the government securities.(say the Percentage fixed for the SLR is 25% than 25%of95 will be invested as the SLR PLR.Is the percentage of amount left after deduction of CRR and SLR from the total liability of any bank, and lend to the Sectors at lower rate of interest as compare to another lending. RR-Lending rate offered by the RBI to other banks for short term lendin against the private securities. RRR- It is the opposite of RR(means rate at which RBI offers the securities to the banks) Reply
215.
Pankaj Says:
Why after independence GOI led by jawahar lal nehru focused on secondary sector of the economy i.e. industries,knowing the fact we were lagging in technology and capital.why had not focused on agriculture .Like CHINA having almost same situation as india did at that time(focused on the Agriculture).If we would have focused on the agriculture,we should have ahed of chinaplease tell me was nehrus vision not clear at that time Reply
216.
Romi Says:
what is the difference between repo rate & bank rate because looking at the definition mentioned above, it is contradicting. Reply
1.
June 1, 2009 at 12:52 pm
Hi Romi, Repo Rate: Rate at which commercial banks borrow funds from RBI for a shorter period of time mainly to maintain its CRR level.
Bank rate: rate at which commercial banks borrows funds from RBI for a longer periosd of time. Reply
217.
priyanka Says:
October 18, 2008 at 11:12 am
pls tell me the relation between bank and plr,slr,crr,rr,rrr? Reply
218.
Manish Gandhi Says:
how export & import affect to INR Reply
219.
Manish Gandhi Says:
1.pls explain the difference between bank rate and repo rate? 2. What is the subprime crisis? And how has it affected the banking system in India. Reply
220.
Harjeet singh Says:
October 16, 2008 at 11:14 am
sir / madam, why government didnot make the vacant seats filled to make the smooth running of the system. Reply
221.
Harshdip Singh Says:
October 15, 2008 at 11:54 am
great n simple..please specify current rates Reply
222.
Dhaval Mehta Says:
October 14, 2008 at 10:59 am
hi, can you pls tell me what is the difference between a Repo and CBLO? Also how does it impact the financial stock markets? thanks. Reply
223.
Jay Says:
Really Ive got good explanations for these REPO,Reverse REPO, CRR, SLR Thanxxxxxxxxxxxxxxxxx Reply
224.
Lokesh swarankar Says:
Dear sir, its very good site, and the way of expression of the answers is quit easy anybody can understand these terminology easily. thnks Reply
225.
Rakesh Says:
Everybody asked about the difference between repo rate and Bank rate without even noticing that Mr.AADESH SRIVASTAVA has already replied to the thread clearly indicating the difference between the two. The difference is that Bank rate is the long-term lending rate while Repo rate is the short-term lending rate
Reply
226.
sambhav kumar Says:
what is difference between reverse repo & bank rate Reply
1.
June 1, 2009 at 12:49 pm
Sambhav, Reverse Repo: rate at which Commercial Banks park excess funds with RBI. Thus, it is the rate at which commercial lends to RBI. Bank Rate Rate at which Commercial banks borrows funds from RBI which is for a longer period of time as compared to Repo rate. If you have understood, now answer me: Can an economy set the reverse ropo rate higher than the bank rate? If yes, then what does it indicates? Reply
1.
ashu Says:
August 17, 2010 at 4:40 pm
YES Country needs huge funds or its development or clearing its loans to foreign agencies urgently.
227.
Upmanyu Moghe Says:
These are the infos which one must aware of. Especially an MBA student must know all these terms of finance.. Thnx 4 providing such knowledge.. Reply
228.
umesh Says:
hi thanks for giving such basic information Reply
229.
navneet Says:
thanks sir these definitions r really very simple n excellentbut can u plz clear me that if rbi has tool like CRR than wats d need 4 reverserepo rate
Reply
230.
August 29, 2008 at 1:43 am
Regarding Repo and Bank Rate: Repo is short term whereas Bank rate is long term. Thus Repo rates are also called short term lending rate and Bank rates are called long term lending rates. Now if the Repo rate > Bank rate, it signifies that short term borrowing of funds is more expensive for commercial banks. Incedentally, this short term borrowing through Repo is required by the banks to maintain its CRR. Thus if Repo rate is increased, bank will reduce its lending to public because to maintain the CRR bank will have to now borrow from RBI at a higher Repo rate. Thus increase of Repo is done to suck liquidity from the economy. Reply
231.
MadhuSudhan Says:
August 12, 2008 at 11:54 am
thank you for your detail explanation . Thanks. Reply
232.
Anu Says:
August 1, 2008 at 12:46 pm
Above provided information is still confusing for me..what do we mean by short term and long term ??? Thanks Reply
233.
Mallikarjuna Reddy T Says:
July 30, 2008 at 6:50 pm
what is Gold ETFs? How does it works? ETFs effeted wirh gold rate or not? Reply
234.
Abhishek Bafna Says:
July 12, 2008 at 10:15 pm
What is the difference between Reverse Repo Rate and CRR When in both cases it is used to control the excess liquidity in the economy Reply
235.
bhanu Says:
July 8, 2008 at 8:38 am
jhlj /kh J:j:j:LMh;Lm:lh/lhdf .h
Reply
236.
sushil kumar Says:
July 7, 2008 at 2:28 pm
hi sir, these definitions are very good and easy to understand for non commerce students.thank you very much. Sushil k. Reply
237.
Monika Madane Says:
July 4, 2008 at 6:00 pm
sir please explain me the causes of inflation in worldand in specialy in india???? Reply
238.
Monika Madane Says:
July 4, 2008 at 5:57 pm
what is PLR, related to RBI? Thanks in advance..
Reply
239.
Chanda Says:
June 17, 2008 at 1:24 pm
what is PLR, related to RBI? Thanks in advance.. Reply
240.
nandan Says:
May 9, 2008 at 5:44 pm
Hi, have had a basic querry itd be great if you could help me out with it. Or a few links to where i could go into depths of this matter.. If we are considered a relatively poorer country why cant we just make or print more money and make it available to become a richer country.. what are the factors that affect a richness or poorness of a country.. Reply
1.
ashu Says:
August 17, 2010 at 4:48 pm
Thats What India has done..at the time of independence RS 3 = 1 dollar Today Rs47 = 1 Dollar
Reply
241.
Vanshdeep Says:
May 2, 2008 at 11:29 am
I have a question that in the case of Bank rate and repo rate both, bank is borrowing money from RBI to meet their lending requirements, then what is the difference between the two. Reply
1.
Pradeep Says:
In Case of Repo rate the banks have to sell the securities to the bank to borrow monwy from RBI. In case of Bank rate there is no need to sell securities. Reply
242.
Srinu Says:
April 26, 2008 at 11:40 am
Could you please the difference between bank rate and repo rate? Both of them involve the borrowing of money by commerical banks from the RBI. Reply
1.
March 4, 2011 at 1:31 pm
Bank Rate is that rate at which the RBI lends overnight money to commercial banks. Repo rate is the rate at which the RBI buys government securities from the market to infuse liquidity in the system. Reverse repo rate is the rate at which the RBI absorbs excess bank funds by selling government securities in the market. If liquidity is abundant in the system, then reverse repo becomes the key policy rate, but when liquidity is scarce and banks borrow from RBI, the repo rate is the policy rate. A cut in repo rate is a signal to banks to pare their lending and deposit rates but its effectiveness depends on liquidity in the system. Reply
243.
samik dasgupta Says:
April 20, 2008 at 10:07 pm
dear sir, I have the following queries: 1.pls explain the difference between bank rate and repo rate? 2. What is the subprime crisis? And how has it affected the banking system in India. 3. How have the movement of swiss franc in relation to US dollars affected the large corporates in india with respect to option contracts? Shall be much obliged if you can address to the above queries. Reply
244.
AADESH SRIVASTAVA Says:
April 14, 2008 at 9:47 pm
I refer to your article on REPO,REVERSE REPO and BANK RATE. RBI lend to on bank rate, which is 6% and banks borrow from RBI on REPO RATE, which is 7.75%. The differece between two is only of log term and short term lending respectively by RBI TO BANKS. When short term lending is costlier, definietly banks must be planning to borrow cheap funding of more than a year on bank rate. Please discuss the roll of both instruments in controlling economy and liquidity in market. Reply
245.
MANAS BAIDYA Says:
April 7, 2008 at 3:59 pm
i would like to analyse the performance of the Indian bank to forecast which banks will dominate in the future ie best banks. please help how to do? Reply
246.
iasmentor Says:
March 16, 2008 at 3:26 pm
Stock market is a place where the shares of companies are bought and sold(traded). Now sensex in nothing but an index that represents the price of shares of 30 top companies. the points that you see are the weighted average of share prices of these companies. the idea is that you get a representative figure of the share prices for the whole market so that one would
know in which direction is the market moving. so if the prices of 30 companies falls on an average, the sensex points also fall. it will be a complicated exercise for you to understand in what proportion are individial share given the weightage in the sensex. all you need to know is that sensex is a representative figure made to guage the movement of the market. Reply
1.
sri ram Says:
sir.is base rate and rate of interest is same .if different then explain it Reply
247.
sahana Says:
hello sir can u pls brief me about process and mechanism of stock market.what is sensex .and what r these points which keeps increasein or decreaseing?how the value of shares effect the sensex and how r these considered wen the ultimate result is given in points?.. it wil be of a great help if u kindly answer my doubts.and wen is the nex weekly oracle magazine is available.i.e from 5th feb? Reply
LEAVE A REPLY
guest
Enter your comment here...
Fill in your details below or click an icon to log in:

(required)(Address never made public)(required)( Log Out / Change )( Log Out / Change )( Log Out / Change )
1334382444
Archived Entry
Post Date : February 11, 2008 at 1:09 pm Category : Doubts and questions Do More : You can leave a response, or trackback from your own site.
Blog at WordPress.com. Theme: Connections by www.vanillamist.com.
Follow
Follow EconAxis
Get every new post delivered to your Inbox.
Join 39 other followers
Enter your e
subscribe
2502101
http://iasmentor.w
loggedout-follow
bac0a373d4
/2008/02/11/repo
Sign me up
Powered by WordPress.com

Home

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Home

Diunggah oleh

Hak Cipta:

Format Tersedia

Home

Economy and Finance de-mystified!

April 13, 2012 at 4:01 pm

April 11, 2012 at 8:31 pm

Mukul Sharma Says:

April 12, 2012 at 2:17 pm

Thanks a lot Reply

Abhishek Kanthed Says:

April 9, 2012 at 4:38 pm

Good explanation! Thanks! Reply

April 8, 2012 at 10:31 pm

April 11, 2012 at 8:34 pm

Prem Kumar Says:

April 3, 2012 at 8:02 pm

6. MRR article Says:

March 29, 2012 at 8:26 pm

mahesh biradar Says:

March 24, 2012 at 11:47 am

its very important for banking exam thanks Reply

March 24, 2012 at 11:30 am

thnkx dear for ur kind of information. Reply

Anjali Gaur Says:

March 16, 2012 at 1:18 am

Mukul Sharma Says:

March 19, 2012 at 12:35 pm

Anjali Gaur Says:

March 16, 2012 at 1:10 am

March 7, 2012 at 6:39 pm

Mukul Sharma Says:

March 7, 2012 at 8:36 pm

Neeraj choudhary Says:

March 14, 2012 at 11:42 pm

nitesh kesariya Says:

March 6, 2012 at 6:05 pm

Mukul Sharma Says:

March 7, 2012 at 8:37 pm

March 1, 2012 at 7:29 pm

whts d difference b/w bank rate and repo rate Reply

mohd mohsin Says:

March 5, 2012 at 7:33 pm

February 29, 2012 at 11:11 pm

tell me about commercial paper ad commercial bill Reply

April 3, 2012 at 10:57 pm

February 23, 2012 at 8:52 am

February 26, 2012 at 7:57 pm

April 8, 2012 at 11:25 am

February 29, 2012 at 2:21 pm

March 2, 2012 at 9:37 pm

I kn its lots but helpful

April 11, 2012 at 1:39 pm

NOOPUR RAGHOJI Says:

February 17, 2012 at 9:57 am

February 26, 2012 at 7:55 pm

April 9, 2012 at 10:33 pm

manish aryan Says:

February 16, 2012 at 6:06 am

February 14, 2012 at 8:47 pm

February 10, 2012 at 12:08 am

February 11, 2012 at 4:43 pm

sunil chauhan Says:

January 20, 2012 at 8:52 pm

Mukul Sharma Says:

January 22, 2012 at 11:16 am