What is Bank rate?
Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes.
CRR (Cash Reserve Ratio)
CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don’t hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI).
SLR (Statutory Liquidity Ratio)
This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some other approved securities to liabilities (deposits) It regulates the credit growth in India.
Repo Rate
Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, 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
Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate means that the RBI is ready to borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep more and more surplus funds with RBI.
Important Banking Acronyms you must know
TERM
FULL FORM
AFS Available for sale
ALM Asset liability Management
BFS Board for Financial Supervision
CRA Credit rating Agency
BSE Bombay Stock Exchange
BRIC Brazil, Russia, India & China
CAPM Capital Asset Pricing Model
DIF Deposit Insurance fund
FSI Financial Stress Indicator
GDP Gross Domestic Product
GDS Gross Domestic Savings
MSS Market Stabilization Scheme
SENSEX Bombay Stock Exchange Sensitive Index
NPA Non-Performing Asset
SME Small and Medium Enterprise
TA Total Assets
TDS Tax deducted at Source
WEO World Economic Outlook
WADR Weighted Average Discount rate
and students if u have any query please contact us : +91-7737550262
Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes.
CRR (Cash Reserve Ratio)
CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don’t hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI).
SLR (Statutory Liquidity Ratio)
This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some other approved securities to liabilities (deposits) It regulates the credit growth in India.
Repo Rate
Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, 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
Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate means that the RBI is ready to borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep more and more surplus funds with RBI.
Important Banking Acronyms you must know
TERM
FULL FORM
AFS Available for sale
ALM Asset liability Management
BFS Board for Financial Supervision
CRA Credit rating Agency
BSE Bombay Stock Exchange
BRIC Brazil, Russia, India & China
CAPM Capital Asset Pricing Model
DIF Deposit Insurance fund
FSI Financial Stress Indicator
GDP Gross Domestic Product
GDS Gross Domestic Savings
MSS Market Stabilization Scheme
SENSEX Bombay Stock Exchange Sensitive Index
NPA Non-Performing Asset
SME Small and Medium Enterprise
TA Total Assets
TDS Tax deducted at Source
WEO World Economic Outlook
WADR Weighted Average Discount rate
and students if u have any query please contact us : +91-7737550262
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