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Q.

What is the meaning of bank rate, CRR, repo and reverse repo. and what are the current rate of these four?

Asked by saran, 04 Oct '08 11:12 am
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Answers (4)

 
1.

Bank rate is the rate at which RBI lends to the commercial banks for short term period. CRR or cash reserve ratio is the portion or percentage of liabilities(Net demand and time liabilities) of commercial banks that they need to keep with the RBI( so that RBI can help them with cash at time of need), Repo rate is the rate at which RBI lends to the commercial banks against government securities and when RBI borrows back from these commercial banks, it is known as reverse repo rate. bank rate is 6%, CRR is 6.5%, repo rate is 8% and reverse repo rate is also 6%
Answered by shweta sinha, 24 Oct '08 05:11 pm

 
  
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2.

Bank rate is the interest charged by banks on loan.crr is the %age of banks fixed deposit kept with rbi.
Answered by Damodar Biswal, 04 Oct '08 12:26 pm

 
  
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3.

Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the Money supply

Repo rate
Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get Money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive

CRR or cash reserve ratio is the portion or percentage of liabilities(Net demand and time liabilities) of commercial banks that they need to keep with the RBI( so that RBI can help them with cash at time of need),
Answered by chauhan viresh, 27 Oct '09 06:28 pm

 
  
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4.

Bank rate is also called as the discount rate. It is the rate of interest which a central bank charges on the loans and advances provided to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the money supply. It is the only rate which helps the economy in controlling inflation and deflation. Bank rate serves as a basic parameter to the commercial banks to fix interest on long term loan to the individuals and coporates.
Answered by chandresh sayani, 01 Oct '09 02:44 pm

 
  
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