Wednesday, April 1, 2020

Know these Bank rates

Dear All

Today is the first day of the new Financial year and we all are free now as lockdown prevails due to Corona crisis, so let's start  it with learning few relevant financial terms used in our day to day activity.

*"An investment in knowledge pays the best interest"*
       - Benjamin Franklin

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*Know these Bank Rates*


*Repo rate* is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

*Reverse Repo Rate* is the rate at which the Reserve Bank of India borrows funds from the commercial banks in the country. In other words, it is the rate at which commercial banks in India park their excess money with Reserve Bank of India usually for a short-term.

 *Cash Reserve Ratio* (CRR) is a certain minimum amount of deposit that the commercial banks have to hold as reserves with the central bank. CRR is set according to the guidelines of the central bank of a country.

*(Statutory Liquidity Ratio)* (SLR) is the money a commercial bank needs to preserve in the form of cash, or gold or government authorized securities (Bonds) before providing credit to their own customers. SLR rate is decided by the RBI (Reserve Bank of India) as well as to control the expansion of bank credit.

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