CRR SLR and Allterms

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Repo, Reverse Repo, Bank

Rate, Call Rate, CRR &
SLR Definitions
Mukul Sharma / February 11, 2008
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)
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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.
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February 11, 2008 in Doubts and questions.
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CRR & SLR Definitions
3 of 139 5/9/2014 12:27 AM

April 30, 2014 at 12:23 pm
Nice respond in return of this matter with firm arguments and explaining
everything regarding that.
Reply
sandeep rawat April 15, 2014 at 10:07 am
Sir plzzz can u explain me all the terms related to banking, finance and
economics..my email id is sandeeprawat653@gmail.com
Reply
praful January 3, 2014 at 9:33 pm
sir can you please send me the material on banking and economy ,plus
finance.
my email id is prafulchaudhary20@gmail.com.
I will be thankful to your effort anyway.
Reply
Jitendra Gautam December 30, 2013 at 11:53 am
Sir please
send me banking interview material at jitendragautam15@yahoo.com
Reply
alisha December 27, 2013 at 2:22 pm
hi sir my question tht hw I prepare 4 interview
4 of 139 5/9/2014 12:27 AM

Reply
priya December 22, 2013 at 11:29 am
Sir please send me material in hindi medium for economics. I am preparing

for examination conducted by Staff Selection Commission and banking. My
email-Id is
Reply
jitesh December 15, 2013 at 11:58 am
sir please can you tell me why the difference between reverse repo rate and
repo rate is always maintained as 1. presently(7.75-6.75 = 1)
Reply
abhijit shah December 13, 2013 at 9:31 am
sir can you plz mail me the study material on banking & economy my mailed
is abhijit35shah@gmail.com
Reply
abhijit shah December 13, 2013 at 9:32 am
sir m preparing for mba group discussion interviews and planning to

give cfa
Reply
Dharmendra Prasad November 29, 2013 at 1:57 pm
5 of 139 5/9/2014 12:27 AM

Thanks Sir,
Reply
Sandeep Kumar November 7, 2013 at 8:31 pm
Sir please send me material in hindi medium for economics. I am preparing

for examination conducted by Staff Selection Commission. My email-Id is
jsk41987@gmail.com.
I will be grateful to you.
Thank You Sir.
Reply
Amandeep Singh November 4, 2013 at 6:52 pm
Sir I want to know diff between repo rate and bank rate.
Thanks
Aman
Reply
priyanka December 15, 2013 at 8:57 pm
repo rate is for less than 90 days & bank rate for more than 90
days
Reply
6 of 139 5/9/2014 12:27 AM

Vikram October 29, 2013 at 10:25 pm
Grt I was stuck to understand IS,LM curve due to these terminologies.. I

can try now.. Please send me more interesting material for Macro
Reply
Vikram October 29, 2013 at 10:26 pm
my mail id is vikramzee@gmail.com
Reply
Pardeep kumar October 15, 2013 at 9:10 pm
Plz send a copy at my email id
Reply
Tousif Mokashi October 12, 2013 at 8:19 pm
Sir thanx a lot for d explaination in simple words thanx a lot sir
Reply
santosh October 4, 2013 at 1:43 pm
Thank you sir.

please share such banking terminologies to me. If possible send some guide.
to santosh4418@gmail.com
Reply
7 of 139 5/9/2014 12:27 AM

prashant tripathi October 2, 2013 at 2:59 pm
Sir,
We all are thankful to you for this simple explanation. I couldnt understand
the difference between repo rate and bank rate. Is it only that bank rate is a
long term instrument and repo rate is a short term instrument?
Reply
Ajay September 28, 2013 at 2:57 pm
pls send me financial and general awareness

ajakumar96420@gmail.com
Reply
Kiran September 24, 2013 at 4:17 pm
Thanq sir for ur material and i want a general awareness book for IBPS
exams plz tell me..
Reply
Ankur September 21, 2013 at 4:35 pm
Hello sir,
I have read your description and u describe in easy terms also. But can u
explain how it will affect banking and economic condition?
Reply
ram September 20, 2013 at 12:04 pm
8 of 139 5/9/2014 12:27 AM

hello sir, good morning, can you explain about the sensex and the
investments.
Reply
Gaurav September 8, 2013 at 2:29 am
i have searched so many sites to get this info.never before it was

explained in such eassy manner.. Great job done by you.. Sir please share
some more banking terms, stock exchange, Mutual Funds concept with us.
Actually i am preparing for the Po examination. So please send general
awareness material on my email id that is gkhanna22@gmail.com . Thank
you so much once again.
Reply
Mukul Sharma September 14, 2013 at 11:19 pm
Thanks Gaurav for your appreciation
Reply
Yasar ali September 2, 2013 at 12:53 am
Thank q sir..i m always confuse between these economic terms
Reply
Yasar ali September 2, 2013 at 8:03 pm
Sir.. I would be like to know that the difference between bank rate
and repo rate
Reply
9 of 139 5/9/2014 12:27 AM

Pleasure is all mine Yasir
Reply
aparna khsandai August 25, 2013 at 12:41 am
thank u sir,actually i didnt understand the difference between bank rate and
reserve repo rate..
Reply
nimish upadhyaya September 7, 2013 at 10:48 am
thanxx sir
Reply
The pleasure is mine Nimish
Im glad I could be of help.
Reply
10 of 139 5/9/2014 12:27 AM

Vishnu Gupta August 17, 2013 at 11:31 am
You actually cleared my concepts today. Thanks a ton.
Reply
The pleasure is all mine.
Reply
ravi July 25, 2013 at 2:14 pm
sir i want to ceack ibps so please help in banking term
Reply
tina July 16, 2013 at 9:42 pm
thank u sir for xplaining banking terms in a simple way ,that everyone can
easily understand
Reply
The pleasure is all mine Tina
Reply
11 of 139 5/9/2014 12:27 AM

Rajnishkumar July 9, 2013 at 3:50 pm
Sir,
Sir,
Kindly reply for me
What is base rate
Reply
Sweety July 19, 2013 at 12:13 pm
Bank rate is also called as base rate.
Reply
Rameez Bhat July 4, 2013 at 12:46 pm
Hello sir,
I am very much thankful to you for providing information in such an easily
understandable form,
i would also like to know that who can fix the Repo rate and reverse Rep
Reply
Hello sir,
I am very much thankful to you for providing such an easily understandable
form,
i would also like to know that who can fix the Repo rate and reverse
Reporate.
Reply
12 of 139 5/9/2014 12:27 AM

i would like to know that, who fixes the Repo Rate and Reverse Repo Rate.
Reply
vijaya July 3, 2013 at 12:45 pm
thank you mukul jii.
Reply
nagesh June 30, 2013 at 5:11 pm
its good
Reply
Rajan Darji June 27, 2013 at 11:58 pm
Nice information provide by you so thanks
Reply
KAUSAR KHALID June 26, 2013 at 11:45 am
Hi Mr. Mukul
My Interview is schedule on tomorrow for Bank Faculty General Awareness,
could u pls suggestion & tips for clearing the same, I am very thankful to you,
its urgent
Reply
13 of 139 5/9/2014 12:27 AM

payal June 21, 2013 at 9:15 pm
sir kindly tell me how should prepare for banking exams books etc
Reply
Anisha Shrivastava June 15, 2013 at 8:36 pm
sir i want study materials for bank.i want materials related to

banking,financial and Economic
Reply
Alka Mohapatra June 14, 2013 at 4:29 pm
txs sir i searched many sites but in your site i found all answers .i am
preparing for banking exams sir could u please advise me some tips about
banks.how banks operate.. the roll of banks in our societyetc.or could
u tell me some books name that i will prefer for better result..actually sir i
m very poor in economics and general awareness so i decided to turn my
weak point into my strong point. so sir please help me out. i will be grate
full to you..thanks sir
Reply
dharmendras June 12, 2013 at 9:02 pm
sir plz can you convert in hindi slr crr repo rate r.repo rate bank rate thnx
Reply
Mukul Sharma June 14, 2013 at 10:55 am
14 of 139 5/9/2014 12:27 AM

hi,
sure il try to do that
Reply
Niharjyoti Deka April 25, 2013 at 7:56 am
Sir,
I m simply not getting words how to appreciate ur explanation n your effort to
make clear a concept..while searching about bank rate in google ,suddenly i
discovered d link and i was so much satisfied.Thanks a lot sir, I have worked
as a teacher in senior seccondary schools for more than 3 years,so could
really understand d way u were putting your best efforts to make a funda
clear.
Being from Chemistry background, i face some problems while studying
economics, but i cordially request you to help me in learning eco explaining in
simple way with d basic concepts clear.
Thanks a lot sir.
Reply
Mukul Sharma May 12, 2013 at 12:06 pm
Hello,
I deeply appreciate your appreciation. I have dedicated myself to
bringing economics closer to people who want to learn it. So you
can say Simplify is my motto and I would love to keep simplifying
for you guys. Your appreciation motivates me no end and gives me
an immense satisfaction.
Regards,
Mukul Sharma
Reply
amaresh June 18, 2013 at 2:18 pm
The explanation is explained in a simple and lucid manner.
15 of 139 5/9/2014 12:27 AM

Pls send me the guide.
Thanking you
AMARESH
alam April 19, 2013 at 9:58 pm
Quite helping
Reply
rakhi April 16, 2013 at 10:59 pm
it is gud
Reply
rakesh chauhan March 20, 2013 at 1:18 pm
definition is understandable .but needs som example based on these
Reply
guncha February 14, 2013 at 5:16 pm
sir i am a computer post graduate.i have cleared the ibps clerk 2 exam. pls
guide me for interview preparation
Reply
anjali March 18, 2013 at 3:01 pm
16 of 139 5/9/2014 12:27 AM

hi madam
i want to give this IBPS exam
can you guide for the same?
Reply
Santosh kumar February 14, 2013 at 11:45 am
I need some help from your side regarding banking terms materials,pls send
on my email id
Reply
guncha February 13, 2013 at 5:21 pm
sir plz tell me about SHG,MUTUAL FUNDS,NEFT, RTGS
Reply
moniya bajaj January 31, 2013 at 8:38 pm
HELLO SIR..
i m having interview.what r the questns commonly asked in the intrvw related
to personal and banking..can u plzz sent in eng as well as hindi alsoplzz
sir..
my id iz moniya _bajaj@rediffmail.com
Reply
suvidha bramhankar January 30, 2013 at 8:27 pm
Hiii Mukul Sharma.Sir.. I must appreciate your efforts of making understand

the different terms on banking in such a simple language. Anyone even a
novice would understand that the meaning ..Simply superb.I was trying hard
to understand these terms from inetrnet but finally today I could clearly
understand all the terms. I need your help. Please help me to get access to
17 of 139 5/9/2014 12:27 AM

more of your content on banking,finance,market related terms. Can you mail

me the notes. Please Sir
THANK YOU
Reply
simer January 16, 2013 at 1:03 am
repo rate is the rate in which banks purchases govt securities and lend
money to rbi at a interest called repo rate
Reply
kbenhavn huslejenvn January 14, 2013 at 7:55 pm
Very nice post. I just stumbled upon your blog and wanted
to say that I have really enjoyed browsing your blog posts.
In any case I will be subscribing to your feed and I hope you write again very
soon!
Reply
Mukul Sharma January 29, 2013 at 12:07 pm
Thanks so much for your generous praise and subscription. Its

encouraging.
Reply
18 of 139 5/9/2014 12:27 AM

anjali March 18, 2013 at 2:59 pm
sir can you explain me that is CRR apply on net income of

bank?
santhiya January 14, 2013 at 1:40 pm
hello sir,i am having interview,what r the question commonly asked in the

interview,related to personal,and banking sir,can u plz sent?
Reply
priya December 29, 2012 at 4:44 pm
hii sir ur blog is really helpful for those aspiring fr bank jobs..im a btech
graduate from mechanical backgroundm trying fr bank jobs i hav given
many intvws but dint get selected both fr pos n clericali think m not able to
answr them proparly abt the basic. questn..lik how ur mechanical knwldg will
b useful for our banks..? plz kindly rply me..i hav two more intvws in hand..
Reply
Sudha December 26, 2012 at 1:36 pm
Sir,i m BE Degree holder..have an interview for PO..can i get some idea

about bank interview..which type of questions will be asked there.
Reply
Pragya jain December 24, 2012 at 6:24 pm
What is the diffrence b/w bank rate and repo rate Moreover crr or slr
19 of 139 5/9/2014 12:27 AM

should fluctuate daily as deposit with commercial bank changes daily
Reply
Mukul Sharma December 24, 2012 at 7:59 pm
Hi pragya, difference between bank rate and repo rate has been
done to death in my previous posts and replies so i would advise
you to look up. If you still have any specific questions then you can
address me. Regarding crr, the amount under crr fluctuates
according to deposits but not every day but calculated as a % of
deposits over a period of time like 15 days or 30 days
Reply
gulshan December 22, 2012 at 5:44 pm
sir snd all the information of all bank rates, markets, in english as wel as hindi
also. plz sir
Reply
gulshan December 22, 2012 at 5:51 pm
ma email id 77gulshan@gmail.com
Reply
B.Swapna December 4, 2012 at 6:53 am
Is bank rate changes from bank to other bank or it should be as provided by

RBI..please give me explanation
Reply
20 of 139 5/9/2014 12:27 AM

mani December 17, 2012 at 12:01 pm
ya
Reply
B.Swapna January 1, 2013 at 9:08 pm
rbi wil hike this bank rate,i think so
B.Swapna December 4, 2012 at 6:12 am
please send me the material on banking which wil be useful for interviews
Reply
auyshee mittal November 21, 2012 at 11:23 pm
Hello Sir,
I am preparing for campus placement for banks, can you please help me in
telling the meaning of those banking terms which are important for interview.
Regards
Auyshee Mittal
Reply
Anshul October 30, 2012 at 10:10 am
Really a nice definitions
21 of 139 5/9/2014 12:27 AM

Reply
sandyeve October 15, 2012 at 11:26 am
hello sir,
i want to know about what is the difference between base rate and primary
lending rate ?
Reply
sandyeve October 15, 2012 at 12:42 am
hello siri would like to know abt fiscal consolidation
Reply
Prakash October 5, 2012 at 9:55 pm
Sir, Actually I selected in bank,but how to prepare for interview,so i need ur

help. thanks.
Reply
dilip October 4, 2012 at 4:27 pm
Maybo more. Simple
Reply
pranjal doshi September 26, 2012 at 8:53 pm
Basically what is the difference between bank rate and repo rate .
moreover shoudnt CRR or SLR should fluctuate daily as deposits with
22 of 139 5/9/2014 12:27 AM

commercial bank changes daily. what is the criteria for deciding the CRR &
SLR then.
prompt response will be highly appreciated
Reply
Shaheer ali September 17, 2012 at 11:54 pm
Thank u sir for ur valuable information
Reply
Neha September 17, 2012 at 10:02 pm
hi sir, pl temme the diff. between bank rate and repo rate.
Regards,
Neha
Reply
Tribhuwan samrat singh October 13, 2012 at 1:21 am
Sir.how i prepare bank interview in 10 to 20 days
Reply
nitin soni September 8, 2012 at 6:09 pm
Relation and diffrence b/w bank rate and repo and reverse repo rate. how
would be effective on indian economy system
Reply
23 of 139 5/9/2014 12:27 AM

Ankit sharma September 2, 2012 at 11:10 am
sir,kindly tell me the difference between Repo Rate & Bank rate..ill be
greatful,if u give me a proper answer.
Reply
ranjot kaur August 24, 2012 at 6:26 pm
Current rates are -:

bank rate- 9%
Slr- 23%
Crr- 4.75%
Repo rate- 8%
Reverse repo rate- 7%
Reply
amit rai October 28, 2012 at 7:46 pm
Now CRR- 4.50%
Reply
merwin August 18, 2012 at 1:12 pm
thanks for the info sir i have interview next month it really helps me.many
many..thanks..:)
Reply
mathi August 17, 2012 at 4:17 pm
24 of 139 5/9/2014 12:27 AM

hello sir could u tel me what is the current bank rate ,crr,slr,repo rate,reverse
repo rate,base rate pls mail to my id if u ve additional informations
Reply
Ramu August 13, 2012 at 4:36 pm
Great site explained all things in a simple language
Reply
Rajesh sahoo August 3, 2012 at 1:25 pm
Thanks sir, How can i get the electronic ver of your study material & Suggest
name of a good economic book
Reply
Mukul Sharma August 25, 2012 at 10:13 am
Hello Rajesh
Sorry for replying late. Please tell me the exam for which you want
study material. I will tell you accordingly
Reply
riya shukla September 2, 2012 at 10:08 am
sir i would like to know all question related to banking

interviw..tommorow is my interviw can u plz
provide me this as earlier
25 of 139 5/9/2014 12:27 AM

Sandeep Tripathi September 24, 2013 at 2:46 pm
IBPS PO related bank material, please let us know.

Thanks in advance
sonu July 27, 2012 at 7:01 am
relationship between repo rate changes and inlation?
Reply
sonu July 27, 2012 at 7:00 am
relationship between repo rate changes and inflation?
Reply
jaspreet July 20, 2012 at 4:22 pm
hello admin.
plz clarify me the difference between repo rate and bank rate.
Reply
Surinder Seth July 22, 2012 at 1:14 pm
BANK RATE IS A RATE CHARGED BY BANK FOR LENDING ITS

FIRST CLASS CUSTOMERS WHERE AS REPO RATE WITH
ONLY RBI NOT PUBLIC
Reply
26 of 139 5/9/2014 12:27 AM

chhavi panwar July 16, 2012 at 1:49 am
hj
Reply
thanxxx sir to provide this knowledge about banks terms thr is my bank
inerview it will helpfull for me thanku again
Reply
sir i also want to know what is inflation and deflation actually sir i
have some doubt about it so sir pls tell me
Reply
Suyog July 11, 2012 at 3:28 pm
Bank rate, Rapo rate, CRR & SLR amongst these which is the most effective
measure to control the liquidity in the economy?
Reply
27 of 139 5/9/2014 12:27 AM

sachin June 26, 2012 at 1:14 pm
thank u sir.i hae search soo many sites for this info.never before has this
been expalined in an easy way
Reply
sachin June 26, 2012 at 1:08 pm
i have searched so many sites to get this info.never before it was

explained in such eassy mannerthanks a lot sir
Reply
Mukul Sharma June 26, 2012 at 1:17 pm
Thanks so much Sachin. You appreciation is appreciated.
Reply
Manoj June 22, 2012 at 8:50 am
Sir,is there any difrnc btwen BANK RATE AND REPO RATE,bcoz in both RBI
is giving funds..
Reply
28 of 139 5/9/2014 12:27 AM

ree June 23, 2012 at 9:23 pm
yes,in REPO there is need of security submission while in bank rate

it doesnt.
Reply
Manoj June 22, 2012 at 8:37 am
Thanks sir for sch an easy understandbl informsn
Reply
Aminuddin Ansari June 20, 2012 at 4:38 pm
Dear Sir, kindly provied me all mertrials in Hindi language It great help for
understand me.
Reply
Dear Amin,
Please check your e-mail inbox for details of getting the material in
Hindi
Mukul
Reply
D S Meena June 19, 2012 at 9:46 am
Your are great sir
29 of 139 5/9/2014 12:27 AM

Reply
Dear Mr Meena,
Thanks so much, you appreciation is appreciated. In fact it keeps
me going. But I am nowhere close to what you described me. I am
and always will be a student of economics, never an expert.
Reply
Samantha P. June 19, 2012 at 3:16 am
Great Post here, Quality for sure
Reply
namrata June 11, 2012 at 9:35 pm
thanxxxxxxxxxx for giving this info
Reply
Its a pleasure. Your appreciation is appreciated.
Reply
Rambabu June 10, 2012 at 8:04 am
Hi. . . . Sir thanks for providing dis info.

its. . . . Superb.
30 of 139 5/9/2014 12:27 AM

I have a doubt that is 1) what is euro zone? How indian economy will be
effected on it? 2) what are the reasons decreasing value of rupee. . .?
Reply
Hello,
Euro zone is a collection of European countries who are a part of a
European Union. Indian Economy is affected by it and vice versa as
we do a lot of business i.e exports and imports in that region so
economic climate there will affect us. Rupee is falling because a)
Foreign investors are fleeing india b) our imports are rising over
exports
Reply
Prakash May 25, 2012 at 12:14 pm
Prakash says :
Hello sir , i would like to ask about the SLR, how it function, it regulatory
fuction with Banks & RBI,effect on comman peoples.Upadates information
from 1st MAY-12 so on.
Reply
Hello Prakash,
SLR is another instrument of monetary policy that the bank uses to
manage liquidity in the economy. Under this, the banks are required
to maintain some amount its funds in the form of government
securities and other liquid assets. Usually this ratio is much higher
than CRR and is more infrequently used than CRR.
RBI can affect the common man through its monetary policy
instruments by increasing or decreasing policy rates which
increases and decreases the borrowing cost of the common man
and affects his consumption, borrowing, saving and spending
31 of 139 5/9/2014 12:27 AM

patterns.
I hope your doubt is solved. All the best!
Reply
nirakar May 4, 2012 at 1:13 pm
its nice and helpful
Reply
ajit singh April 29, 2012 at 9:46 am
provides good knowledge
clarifies the differences
Reply
Thanks Ajit, You appreciation is appreciated!
Reply
32 of 139 5/9/2014 12:27 AM

sameer April 28, 2012 at 6:23 pm
Its good
sir,the explanation of all the terms is excellent but could u plz tell me the role
of world bank in our economy, the only thing i know about world bank is that
our govt. takes loan from the same.
is RBI works under it or not?
Reply
Hello Sameer,
The role of World Bank in our economy and for that matter any
economy is to provide funds for social and infrastructural
development projects. Yes World bank does grant loans to govt.
departments for individual projects. And NO, RBI is not in any way
under the World Bank.
Reply
vidya April 25, 2012 at 1:36 pm
Dear Mr Mukul Sharma,
Is the CRR applicable for scheduled and non scheduled banks alike? is the
rate same for both the categories?
Reply
Dear Vidya,
Yes CRR does not make any distinction between scheduled and
non scheduled commercial banks in terms of applicability or rates.
33 of 139 5/9/2014 12:27 AM

I hope your doubt is cleared. All the best!
Reply
srinivas April 25, 2012 at 7:24 am
very niceand helpful
Reply
Piyush April 25, 2012 at 6:40 am
Provide best knowledge
Reply
Thanks Piyush,
Your appreciation is appreciated!
Reply
Rakesh Solanki April 23, 2012 at 12:43 pm
Hello Mukul,
what is the difference between BPLR and Base rate?
Reply
priya April 18, 2012 at 4:17 pm
34 of 139 5/9/2014 12:27 AM

i hav confusion that what is the relation between lowering crr repo and bank
rate..though lowering repo rrate is clear to me bt hw these three are
related..pls explain numerically
Reply
Mukul Sharma April 23, 2012 at 12:55 pm
hi, there is no relation between crr and bank rate, these are two
different interest rates through which RBI exercises its monetary
policy. CRR shows long term cost of lending of banks from RBI,
and bank rate is the long term rate for the same.
Reply
Sudhir April 15, 2012 at 7:58 pm
Hi sir,
As you had explained that high repo signifies the rate at which liquidity is
injected. It means when repo rate is increased , the banks can have to pay
higher interest to govt and they also charge higher interest from common
public which gets discouraged to take more credit from banks , because of
which there is less supply of money in system and there is less Liquidity.This
Contradict your statement.Can you please elaborate it ?
Reply
hi,
it is not a contradiction, your understanding of repo rate is spot on,
except for the fact that banks take funds from the rbi and not the
govt. high repo signifies the rate at which liquidity is injected
because as it goes up, the cost of injecting more liquidity into the
monetary system goes up.
Reply
35 of 139 5/9/2014 12:27 AM

Udhay April 13, 2012 at 4:01 pm
Very simple and fantastic to understand the basics and the terms.
Reply
thanks so much uday for your appreciation
Reply
yallappa hosamani September 15, 2012 at 7:01 pm
what is the difference between Repo rate and Bank rate
Reply
Sneha 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
Thanks a lot
Reply
36 of 139 5/9/2014 12:27 AM

Abhishek Kanthed April 9, 2012 at 4:38 pm
Good explanation! Thanks!
Reply
mukta April 8, 2012 at 10:31 pm
Im not able understand the difference between bank rate and repo rate?
Can anybody explain please?
Reply
Udita 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
Prem Kumar April 3, 2012 at 8:02 pm
Im not able understand the difference between bank rate and repo rate?
Can anybody explain please?
Reply
Pingback: MRR article
37 of 139 5/9/2014 12:27 AM

mahesh biradar March 24, 2012 at 11:47 am
its very important for banking exam thanks
Reply
kapil March 24, 2012 at 11:30 am
thnkx dear for ur kind of information.
Reply
Anjali Gaur 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
Mukul Sharma 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
ankit malik June 16, 2012 at 12:42 pm
38 of 139 5/9/2014 12:27 AM

sir u said that repo rate is used to inject liquidity but acc.
to Anjali REPO RATE suck cashm not understand
clearlywould you elaborate this??
Sure Ankit.
The fact is that REPO Rate can be used to both inject
liquidity into and diffuse liquidity out of the system. The
difference lies in the fact whether the repo rate is
increased or decreased. If the repo rate is increased, the
borrowing cost of the bank increases and their demand
for funds decreases. This further reduces the liquidity
injected into the system. On the other hand if repo rate is
decreased, the borrowing cost of the bank is decreased,
which raises their demand for funds and increases the
liquidity in the system.
I hope this solves your doubt. All the best!
Anjali Gaur 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
prince 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
39 of 139 5/9/2014 12:27 AM

Reply
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
Neeraj choudhary March 14, 2012 at 11:42 pm
Also me
nitesh kesariya 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
Complete explanation of sensex is already given in my following

post:
http://iasmentor.wordpress.com/2011/12/13/is-sensex-
a-barometer-of-the-indian-economy/
If you still have any doubts, feel free to ask me.
Reply
40 of 139 5/9/2014 12:27 AM

aastha March 1, 2012 at 7:29 pm
whts d difference b/w bank rate and repo rate
Reply
mohd mohsin 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
sheetal February 29, 2012 at 11:11 pm
tell me about commercial paper ad commercial bill
Reply
Ashish April 3, 2012 at 10:57 pm
commercial bill issued by commercial bank and commercial paper

issued by company.
Reply
Zara February 23, 2012 at 8:52 am
Plz gv me clear difference b/w repo rate and bank rate
Reply
41 of 139 5/9/2014 12:27 AM

$amarth February 26, 2012 at 7:57 pm
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
amit 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 re-discounted 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
42 of 139 5/9/2014 12:27 AM

Sat February 29, 2012 at 2:21 pm
Guys, for simple understanding of economics, check

http://bjnocabbages.blogspot.in/ this guy has written lots of
articles under The Explainer series.
Reply
$amarth March 2, 2012 at 9:37 pm
I kn its lots but helpful
samarth 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
NOOPUR RAGHOJI February 17, 2012 at 9:57 am
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
$amarth February 26, 2012 at 7:55 pm
Hello
From my point of view
43 of 139 5/9/2014 12:27 AM

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
mausam 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
manish aryan February 16, 2012 at 6:06 am
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
sheetal February 14, 2012 at 8:47 pm
44 of 139 5/9/2014 12:27 AM

sir ,
pls explain term repo and reverse repo in term of liquidity
Reply
Bobby February 10, 2012 at 12:08 am
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
Rohit February 11, 2012 at 4:43 pm
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
sunil chauhan 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
Mukul Sharma January 22, 2012 at 11:16 am
Hi Sunil,
45 of 139 5/9/2014 12:27 AM

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
nishant January 24, 2012 at 8:24 pm
repo rate against the securities and bank rate against no

security
sunder acharya September 26, 2012 at 11:51 am
Sir i would like know what is Marginal Standing Facility

rate. how does it function in our banking system. i tried to
find answer in some websites but it didnt convince me.
sunil chauhan January 20, 2012 at 8:46 pm
Do RBI lend money to an individual or an individual organisation (can be a

manufacturing or service but non financial) except commercial banks
Reply
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
46 of 139 5/9/2014 12:27 AM

but you have said that it lends to financial institutions also

right?
Rakesh chaurasia January 20, 2012 at 4:14 pm
Your ans is really mind blowing. Thanks
Reply
jyothy January 5, 2012 at 7:04 pm
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
thanks, sure il write one on Euro soon
Reply
jyoti January 7, 2012 at 10:47 am
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
47 of 139 5/9/2014 12:27 AM

sulekha January 4, 2012 at 2:03 pm
hello mr mukul sharma

sir plz explain about fdi n walmart
Reply
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ankur srivastava December 19, 2011 at 10:44 pm
sir i just want to know difference between slr and plr???
Reply
Mukul Sharma December 26, 2011 at 11:14 am
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
Dear Mr Mukul Sharma,
Does it indicate the minimum rate or the maximum rate of

benchmark?
And the interest rates mentioned..is it for individuald
borrowers?
48 of 139 5/9/2014 12:27 AM

SKUL December 17, 2011 at 10:24 am
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
sunil kumar reddy H December 15, 2011 at 12:08 pm
sir i want to know the exat differenc between Repo rate and Bank rate
Reply
Surge Research Support February 10, 2012 at 10:20 am
You will find all the explanations by visiting this linl:

http://www.ecofin-surge.co.in/terminology.html
Reply
vivek joshi August 28, 2012 at 12:58 pm
bank rate is for more than 90 days while repo rate is for less than
90 days
Reply
Shiv December 14, 2011 at 4:37 pm
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
49 of 139 5/9/2014 12:27 AM

that it need to put money with itself or with bank.
Reply
Vishva Deepak singh 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
saurabh kumar November 21, 2011 at 4:39 pm
i want to PLR.
Reply
amit 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
ganesh November 13, 2011 at 10:39 pm
sir, can u plz tell me the impact of RBI policies towards indian economy
growth?
Reply
50 of 139 5/9/2014 12:27 AM

Mukul Sharma November 24, 2011 at 12:18 pm
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-details-of-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
heena November 13, 2011 at 9:56 pm
sir,
i want to ask what is marginal standing facility rate?
Reply
hi heena if u get the answer for this., post it to me also.,
Reply
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
51 of 139 5/9/2014 12:27 AM

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.
heena November 14, 2011 at 7:55 pm
sir,
plz give the easy definition for u derstanding these term easily
Reply
Dear Heena,
I have tried to make these definitions as simple as
possible. I will still try further if there is any scope.
manik November 11, 2011 at 3:15 pm
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
Hi Manik,
Working of stock market intrigues many management students. I

would surely write a post on this very soon. Keep watching.
52 of 139 5/9/2014 12:27 AM

Reply
shujeetmanij November 7, 2011 at 11:59 am
i want to know that whats the rate of CLR, SLR, BASE RATE, PLR, CRR
Reply
YADIK November 16, 2011 at 12:25 pm
YADIK SAY
RRR:-7.5%,REPO RATE:-8.5%,BANK
RATE:-6%,SLR:-24%,MSF:-9.5%
Reply
Please refer to the RBI website.
Reply
sri ram November 27, 2011 at 7:31 pm
see this rbi site
http://www.rbi.org.in/home.aspx
Reply
amit pahal November 5, 2011 at 10:53 am
53 of 139 5/9/2014 12:27 AM

sir,please give the easy def. Thans
Reply
Mohana November 4, 2011 at 8:42 am
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
Kevin November 2, 2011 at 12:16 pm
Thank you for this article. It was clear and concise and easy to understand.
Reply
Thanks, I appreciate your appreciation.
Reply
uday November 1, 2011 at 11:56 am
hello sir,
simple explanation for all terms. anyone can understand by reading this
page. thank for contribution sir..
Reply
54 of 139 5/9/2014 12:27 AM

If my articles better your understanding, the pleasure is all mine.
Reply
could u tell main diff b/w base rate and repo rate.plz
explain it breifly
nikhil jangid 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
Mukul Sharma 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
55 of 139 5/9/2014 12:27 AM

K. Rakesh Krishna 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
Mukul Sharma 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
linson October 20, 2011 at 4:49 pm
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
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
56 of 139 5/9/2014 12:27 AM

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
priyaharvestr 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
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
Rakesh Solanki April 22, 2012 at 1:10 pm
can you give some examples for schedules and non

schedule banks in india ????
MAHESH SHANTHAPPA September 28, 2011 at 4:27 pm
Hey Nice info very simple to understand
57 of 139 5/9/2014 12:27 AM

Reply
Hi Mahesh,
Thanks for your appreciation.
Reply
john September 22, 2011 at 1:23 pm
copy paste the above text in google translate to hindi..u will understand..re
Reply
ANKIT September 20, 2011 at 5:48 pm
I WANT MEA IN SIMPLE ENGLISGPO RATENING OF RE
Reply
Guddu Bisht September 19, 2011 at 10:32 pm
why are the earthquick effect the stock market
Reply
58 of 139 5/9/2014 12:27 AM

praveenkumar September 18, 2011 at 2:55 am
CRR calculated as a percentage of what?
Reply
sampathu September 23, 2011 at 7:56 pm
CRR wii be calculated on the banks FD. The percentage will be

between
3% to 20%.
Reply
shraddha September 13, 2011 at 1:14 pm
then wat is the difference between bank rate and the repos??
Reply
for example present repo rate is 6% bank rate is 10% and above
Reply
59 of 139 5/9/2014 12:27 AM

shishira February 9, 2012 at 10:34 pm
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
Abhijit September 9, 2011 at 12:35 am
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
mridula September 5, 2011 at 6:20 pm
very clear definitions
Reply
jitendra September 5, 2011 at 12:47 am
SIR PLZ SEND ME AS MOSTLY ASKED IN BANKING EXAM
Reply
60 of 139 5/9/2014 12:27 AM

Satyabrat padhi September 2, 2011 at 9:16 pm
Dear Sir, please give me an example how to calculate SENSEX?
Reply
Mr.Satyabrat.
1 point is equal to 300 crore

1000 point = 3 lakh crore
Reply
gnosiofera September 1, 2011 at 9:52 pm
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
61 of 139 5/9/2014 12:27 AM

Prem 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
sonu 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
Preeti Sharma 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
Preeti Sharma 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
Dharmpal Mandia Choudhary August 19, 2011 at 7:33 pm
62 of 139 5/9/2014 12:27 AM

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
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
pankaj chouksey February 7, 2012 at 9:00 am
very nicely explained sir,
The explanation is really good as its simple to understand.
63 of 139 5/9/2014 12:27 AM

Thanks Vidya,
Your appreciation is appreciated!
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
Anil Patel 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
Anil Patel August 10, 2011 at 10:54 am
waht is marginal rate
Reply
Mukul Sharma August 10, 2011 at 3:55 pm
64 of 139 5/9/2014 12:27 AM

Hi amit,
Please specify which marginal rate you are asking about.
Marginal rate of?
HI Anil,
I have already given all the definitions
Reply
Anil Patel August 10, 2011 at 4:45 pm
where rbi is set marginal rate between repo rate & reverse
reporate
Reply
im sorry amit, i could not really get your question
Rahul August 7, 2011 at 11:51 am
Sir pls elaborate the difference between bank rate and repo rate.
Reply
Hi Rahul, I have already done that. Bank rate is a longer term rate
65 of 139 5/9/2014 12:27 AM

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
Rahul August 7, 2011 at 11:48 am
Sir pls elaborate the difference of Bank Rate and Repo Rate
Reply
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Reply
vineet kushwaha 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
Aditya sharma 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
Neeraj July 9, 2011 at 11:51 pm
What is CRR and Bank Rate?
Reply
67 of 139 5/9/2014 12:27 AM

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
what is exact difference between bank rate and repo rate?

give me a mathematical relationship between both of them
Reply
what is the difference between deposit rate and reserve repo rate
Reply
aditya sharma July 21, 2011 at 12:29 pm
thanx Mukul sir for your response to me
68 of 139 5/9/2014 12:27 AM

Aditya Sharma
Mukul Sharma July 21, 2011 at 1:44 pm
You are welcome. Keep the knowledge express going
priya June 28, 2011 at 2:36 pm
diff b/w repo rate n bank rate z nt very clear
Reply
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
Janu July 15, 2011 at 7:16 pm
Thanks a lot aditya.. Ur explanation is superb..
69 of 139 5/9/2014 12:27 AM

Nimesh February 3, 2012 at 8:00 am
today Bank rate is 6.00% and Repo rate is

8.50%Justify
Akshay Chheda June 22, 2011 at 2:45 pm
Kya samjaya hai yaar..tusi gr88 hothanx
Reply
Mukul Sharma July 21, 2011 at 1:48 pm
Thanks. Im flattered.
Reply
rakesh June 21, 2011 at 6:01 pm
Both bank rate and repo rate mean same ?
Reply
no both are not same repo rate is sub element of bank rate in
prefrence with banks..
Reply
70 of 139 5/9/2014 12:27 AM

pia 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
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
Mukul Sharma July 21, 2011 at 10:53 am
Thanks Aditya, for taking pains to give such good

explanations.
Arthi June 17, 2011 at 9:18 am
sir, i want to know the present rates for BANK, CLR, SLR , REPO RATE,
REVERSE REPO RATE
71 of 139 5/9/2014 12:27 AM

Reply
kavir June 21, 2011 at 12:07 pm
go to RBI website all the rates are radially available
Reply
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
aditya sharma 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%
Marie Sharma Aroquia Dasse

October 7, 2011 at 2:14 pm
Now Repo Rate is 8.25% and Reverse Repo Rate is

7.25%.
72 of 139 5/9/2014 12:27 AM

RDP November 14, 2011 at 1:36 pm
Now Repo rate is 8.5% and Reverse repo rate is 7.5%
sahar 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
Himanshi 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
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
73 of 139 5/9/2014 12:27 AM

subha May 29, 2011 at 3:58 pm
what does capital adequecy ratio mean.
Reply
Hi Subha,
I will explain this concept via a new post. So have a look at that.
Reply
subha May 29, 2011 at 3:37 pm
sir plz tell me how the rates( repo,rrr crr etc)are calculated?
Reply
this all rates calculated by taking in to consideration various

economic factors such as InflATION, gdp etc
Reply
mahesh kumar 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
74 of 139 5/9/2014 12:27 AM

Reply
mahesh kumar May 23, 2011 at 9:16 pm
I dont knw the meaning of bank rate & repo rate

wil u calrify it
Reply
Mukul Sharma 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
bank rates are for long terms and repo rates are for short
term
Jignesh rathod 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
All these rates are given on the site.
75 of 139 5/9/2014 12:27 AM

Reply
Meenakshi V May 13, 2011 at 8:37 am
Please provide Answers to my Query.
Reply
Surge Research Support May 13, 2011 at 11:47 pm
See our post on Highlights of RBI Monetary policy for 2011-12 in

http://ecofin-surge.blogspot.com/2011/05/rbi-unmoved-by-pointers-
to-moderating.html
Reply
Arvind 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
sunny 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
76 of 139 5/9/2014 12:27 AM

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
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
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borrowing rates, inflation is not coming under control.
Reply
pravin jude June 13, 2011 at 4:53 pm
nice explaination>>> rbi behave like surgon who give

treatment to patient irrespective of cause of disease
nice explanation
sachin July 1, 2011 at 11:09 am
To the Point Great Explanation by Mukul .
Subodh October 3, 2011 at 10:59 pm
Good One.
Gururaja Holla.R April 13, 2011 at 11:48 am
Whether Repo Rate and Bank Rate are one and the same.
Reply
78 of 139 5/9/2014 12:27 AM

Ajay Dwivedi 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
Soumyajit April 8, 2011 at 1:09 pm
Nice module. thnx a lot.
Reply
You are welcome.
Reply
Soumyajit April 8, 2011 at 1:09 pm
Nice module
Reply
JAY PRAVIN BOHARA March 19, 2011 at 2:08 pm
Sir pls give us brief idea about fiscal deficit
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Reply
Ravi Teja 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
Sujeet Mishra March 4, 2011 at 12:16 pm
What is the basis of determining dearnss allowance payable to employees in

India?
Reply
ram kumar yadav February 26, 2011 at 3:32 pm
Dear sir
Please tell me
current bank rate,SLR,CRR,R.REPO, REPO
Reply
Thanks
Reply
80 of 139 5/9/2014 12:27 AM

Dear sir
Please send me current bank rate,SLR,CRR,R.REPO, REPO
Reply
DEEPAK SARAF March 26, 2011 at 1:02 am
current bank rate = 6%

SLR = 24%
CRR = 6%
R.REPO = 5.5%
REPO = 6.5%
Reply
ashish koshta 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
Thanks Ashish for the help.
81 of 139 5/9/2014 12:27 AM

Marie Sharma Aroquia Dasse

October 7, 2011 at 2:17 pm
Curret Rate
SLR = 24%
CRR = 6%
R.REPO = 7.25%
REPO = 8.25%
Yatish February 13, 2011 at 9:25 pm
Dear sir
Please send me current bank rate,SLR,CRR,R.REPO, REPO .i have bank
p.o exam
Reply
S. P. Saxena February 17, 2011 at 7:15 pm
Bank Rate : @ 6%
SLR : @ 24%
CRR : @ 6%
R. Repo : 5.50%
REPO : 6.50%
Reply
damoder February 7, 2011 at 1:40 pm
Define PLR and Bank rate in brief with example
Reply
82 of 139 5/9/2014 12:27 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
damoder February 7, 2011 at 1:38 pm
define PLR and bank rate
Reply
anish February 6, 2011 at 5:47 pm
feeling like now i have also knowledge about finance
Reply
sweety January 29, 2011 at 4:45 pm
can u pls xplain why US doesnt have free trade agreement with india? thanks
in advance
Reply
sweety kuriakose January 24, 2011 at 3:15 pm
83 of 139 5/9/2014 12:27 AM

why we use Wholesale price index for the calculation of inflation?
Reply
sandhya January 18, 2011 at 10:42 pm
hello sir plz send present rapo rate bcz i have bank exam
Reply
sunil kumar January 27, 2011 at 10:07 am
rapo 5.75 br 7.25 call 9991318415
Reply

SLR = 24%
CRR = 6%
R.REPO = 5.5%
REPO = 6.5%
Reply
sandhya January 18, 2011 at 10:39 pm
hello sir plz present rapo rate bcz i have bank exam
Reply
vimal singh December 28, 2010 at 5:51 pm
84 of 139 5/9/2014 12:27 AM

what is PLR, related to RBI?

Thanks in advance..
Reply
shindhu December 27, 2010 at 8:15 pm
sir,can u plz tell me how to control reverse repo rate within 2days becoz i
have bank exam
Reply
mamraj December 23, 2010 at 6:39 am
what is slr crr in ?detais
Reply
mamraj December 23, 2010 at 6:35 am
what is real meaning of slr,crr according to indian econmy?
Reply
hardik November 29, 2010 at 9:28 pm
will u explain the difference between bank rate and repo rate
Reply
The SURGE Research Support

November 30, 2010 at 10:05 am
85 of 139 5/9/2014 12:27 AM

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
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raghavan November 28, 2010 at 9:42 am
i need more like this
Reply
Mayank Sinha November 20, 2010 at 2:20 pm
thnx sir
can u pls explain the term credit control nd credit creation..
Reply
Mayank Sinha November 20, 2010 at 2:19 pm
thnx a lot sir..

can u please explain the term credit control nd credit creation.
Reply
paromita November 12, 2010 at 8:18 pm
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
raj naidu 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
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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
paromita November 12, 2010 at 8:09 pm
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
kaamini November 12, 2010 at 3:12 pm
this is very useful for bank exam. and sir please explain the cause of inflation
in india?
Reply
farah November 4, 2010 at 12:19 pm
is repo and reserve repo rate applicable only for scheduled commercial
banks?
Reply
manoj kumar raushan patna October 24, 2010 at 3:27 pm
88 of 139 5/9/2014 12:27 AM

Im extreamly pleasd with your answers.
Reply
Subhash 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
Subhash 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
yogendra September 27, 2010 at 6:50 pm
very nice collection of basic banking terminology.

Thank you
Reply
sukesh 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
89 of 139 5/9/2014 12:27 AM

Mehul August 15, 2010 at 11:19 pm
Thanxs to all..I am sure that this is best site for understanding banking basic
concepts..
Reply
Nagaraj 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
nithin salian 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
ratin 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
90 of 139 5/9/2014 12:27 AM

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
harshit 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
jitendra jain 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
91 of 139 5/9/2014 12:27 AM

jitedra 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
PRADIP DAS 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
nayana May 28, 2010 at 1:40 pm
hello
can u explain me about the GDR
Reply
m.subramanian May 24, 2010 at 10:55 am
please expand and explain YoY.
Reply
NARAYANAN S 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
92 of 139 5/9/2014 12:27 AM

compared and the growth in % as on 31/3/2010 is spelt out with

31/3/2009 as base.
Reply
Please read as 31/3/2010, not as 20100. It is a mistake
shishir kumar 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
Nitin 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
Mahima Rajput April 20, 2010 at 8:51 pm
Dear Sir,
Please explain me difference between bank rate and repo rate
thank you
Reply
93 of 139 5/9/2014 12:27 AM

shimil 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
samir srivastav July 2, 2011 at 6:18 pm
samir says,
bank rate is a discount rate while repo rate is a automatic taxable

rate.
Reply
Krishna Rakesh April 19, 2010 at 9:02 am
The information in the site was very useful for fundementals
Reply
jagadeesh B April 4, 2010 at 4:08 pm
i really satisfied, about this information
Reply
ashish April 2, 2010 at 2:40 pm
Thx sir
94 of 139 5/9/2014 12:27 AM

Reply
Ravish Kumar 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
sagar 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
Vikrant September 16, 2010 at 5:03 pm
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.
95 of 139 5/9/2014 12:27 AM

Kuldeep 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
Kuldeep 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
shyoji yadav March 3, 2010 at 11:54 am
sir,tall me about differant rate
Reply
dileeprocks February 20, 2010 at 9:24 pm
Superb analysation,but it would have been better if u have explained more

clearly the difference of CLR and SLR
Reply
Ghanshyam February 10, 2010 at 4:44 pm
slr and crr are ratio of something.

so pls specify it.
96 of 139 5/9/2014 12:27 AM

donnt post incomplete knowledge.
Reply
dashmesh February 10, 2010 at 2:40 am
thanx for all the information.which is very helpful for me
Reply
suhana January 31, 2010 at 5:34 pm
what is security analysis..
Reply
ashutosh goyal 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
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.
97 of 139 5/9/2014 12:27 AM

Reply
neeraj January 29, 2010 at 1:30 pm
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
Read Handbook of Banking Information

by N S Toor
Reply
sridhar January 16, 2010 at 1:08 am
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
98 of 139 5/9/2014 12:27 AM

Reverse Repo is a short term advance, while bank rate affects the
long term lending
Reply
sridhar January 16, 2010 at 1:01 am
Dear Sir
I want to thank you for the instant ready reference on the Very important
terms Banking System.
Thank you.
Reply
Bineet January 2, 2010 at 9:29 am
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
99 of 139 5/9/2014 12:27 AM

Arjunavadivel December 6, 2009 at 3:00 pm
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
mehrul December 4, 2009 at 1:18 am
respected sir
my question is dat.
what is the effect of subprime crisis on indian banking industry?
Reply
Very little, negligent
Reply
Anonymous November 23, 2009 at 9:17 am
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
Surge Research Support November 24, 2009 at 9:58 am
It is indeed encouraging to see such lucis explanation of
100 of 139 5/9/2014 12:27 AM

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
shikha tyagi November 15, 2009 at 6:10 pm
dear sir,
thanks a lot! i want 2 know about SLR in detail.
plz also tell what paper money means
Reply
Anonymous November 23, 2009 at 9:49 am
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
kumar March 31, 2011 at 1:20 am
repo rate is 6.75 and reverse repo rate is 5.75
Reply
101 of 139 5/9/2014 12:27 AM

Priti November 7, 2009 at 10:38 am
hellonsir,thanks alot.
Reply
MINAKSHI November 6, 2009 at 12:38 pm
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
Prime lending rate is fixed by Commercial Banks, while bank rate ,

repo rate and reverse repo rate are announced by RBI
Reply
lovika November 6, 2009 at 11:51 am
sir/mam
will u explain the difference between bank rate and repo rate
Reply
lijo October 30, 2009 at 8:01 pm
nice explanantion.. thnx!
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Reply
Suchita October 26, 2009 at 3:36 pm
Dear sir,
Thank u sir.
Reply
subair mv October 19, 2009 at 2:44 pm
Thanks sir.
Reply
Yasmeen September 19, 2009 at 12:28 pm
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
Ashima Mahajan September 13, 2009 at 12:47 am
thanx 4 info
Reply
shashi September 11, 2009 at 8:39 am
i would like to thanks for this knowledge
103 of 139 5/9/2014 12:27 AM

Reply
someshwar September 1, 2009 at 7:45 pm
i like thyis side because we get full knowladge
Reply
Pradeep 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
Anoop 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.
104 of 139 5/9/2014 12:27 AM

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
amrendra k 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
Prerna 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
Mandar 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
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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
divya shukla 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
Nitesh 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
raji April 10, 2009 at 8:19 pm
sir i want to know about the current CRR, SLR, REPO,REVERSE REPO
106 of 139 5/9/2014 12:27 AM

RATE AND BANK RATE details
Reply
Tathagata Maiti June 1, 2009 at 12:55 pm
Hello Raji,
Check out this link:

Reply
arpan sharma 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
Simardeep Singh 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
107 of 139 5/9/2014 12:27 AM

You are absolutely right Simardeep, thanks for the clarification
Reply
Rushi March 25, 2009 at 12:36 pm
Hi Everbody I Just want know the Treasury Bills what is 91 days, 364 & 182
Days.
Reply
Om Barnwal March 21, 2009 at 6:24 pm
Dear Sir
Thank U So Much for these informations.
Reply
Sani Simon Ashuli 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
108 of 139 5/9/2014 12:27 AM

Dev Darak July 9, 2009 at 12:22 pm
Hello Sani Simon Ashuli,
Check out this link:

Regards
Reply
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
Raj 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
saran March 9, 2009 at 12:40 pm
GOOD AFTERNOON, SIR
1. THE INTEREST RATE INCREASE WHEN BONDS PRICE DECREASE

WHY.
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2. INFLATION OR DEFLATION WHICH ONE IS FAVOUR FOR OUR

ECONOMY
Reply
Mehul 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
Ashutosh Kr. Singh "suryavansham"

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
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Sharad Jain March 2, 2009 at 12:57 pm
Sir/madam,
i want to know relationship between repo rate, reverse rapo rate and inflation
Reply
Jivitha February 23, 2009 at 6:06 pm
I want to know current rates of Repo, CRR and slr please help
Reply
Anoop 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.
Regards,
Anoop
Reply
poorti February 8, 2009 at 1:20 pm
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
111 of 139 5/9/2014 12:27 AM

rohit bhura February 6, 2009 at 1:46 pm
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
kavitha February 4, 2009 at 5:21 pm
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
Mandar 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
Sourav Datta January 27, 2009 at 2:45 pm
Again another small question.

By the term rate here I think we mean interest rate. Am I right?
Please oblige by answering.
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Reply
yes of course sourav, it is interest rate
Reply
Sourav Datta January 27, 2009 at 2:41 pm
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
anjali January 22, 2009 at 12:43 pm
very good explanation.

thanx coz i was searching desperately for exams.
Reply
pankaj January 22, 2009 at 9:33 am
Hi Dear,
In polity:
Federal:
Means clear cut division of the power betweeen the centre and the
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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
amrendra k January 21, 2009 at 8:12 pm
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
S Sarkar & S Bose January 20, 2009 at 5:45 pm
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
114 of 139 5/9/2014 12:27 AM

S Sarkar & S Bose January 20, 2009 at 5:41 pm
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
pankaj 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
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
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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
S. Sarkar January 20, 2009 at 9:53 am
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
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
pankaj 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
116 of 139 5/9/2014 12:27 AM

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
rohini January 10, 2009 at 1:12 pm
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
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
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.
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Reply
Hi jyoti ..
yes banks use to get interest on SLR securities
Reply
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
Hi guys sorry for not replying since long time.. i was bussy, so i hope so u
people will forgive me ..
Reply
KUMAR SAURAV January 8, 2009 at 10:54 am
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
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Reply
pradeep verma January 7, 2009 at 10:36 pm
how many shares are listing in NSC and BSC?.pls

provied detail.
what is the mean share by back?
Regards
pradeep
Reply
Purushottam kumar January 3, 2009 at 1:58 pm
I am very serious to know about in detail that how crr is going to affect our
indian market.
Reply
amrendra k January 3, 2009 at 12:21 am
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
GAJANAND KUMAWAT January 2, 2009 at 6:26 pm
Thanx for the easy definations.
regards,
G.Kumawat
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Reply
PRAVEEN SHARMA December 29, 2008 at 10:18 am
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
Ali Usman December 28, 2008 at 10:02 pm
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
jyoti December 27, 2008 at 11:21 am
do banks get any intrest on SLR securities which they buy from RBI?
Reply
120 of 139 5/9/2014 12:27 AM

syed ubeid November 29, 2008 at 8:49 pm
rbi cuts the crr, repo rate and slr.

what is the impact of this action on consumers,business, capital markets and
banks?
Reply
ramsankar shroff November 24, 2008 at 4:52 pm
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
ramsankar shroff November 24, 2008 at 4:47 pm
really i am very thankul to all because today i come to know about a lot
about different banking related rates.
Reply
vipinbehl November 21, 2008 at 4:36 pm
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
121 of 139 5/9/2014 12:27 AM

Manjunath Hegde November 15, 2008 at 5:00 pm
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
Amrita November 9, 2008 at 5:26 pm
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
bhushan sahu, bhopal November 4, 2008 at 6:22 pm
thanks 4 giveing ecofriendly, understandable and easy definitions of

CRR,REPO RATE and SLR.
Reply
122 of 139 5/9/2014 12:27 AM

Dhiraj r raisane November 4, 2008 at 2:34 am
whats the reason behind financial crises arises in US & Global.
Reply
jayant sharma November 3, 2008 at 11:35 am
hello sir,iwant to know the basic differance between repo and bank rate and
when both effect.
Reply
Ritesh Kumar November 2, 2008 at 6:59 pm
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
sana 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
123 of 139 5/9/2014 12:27 AM

Pankaj 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
kulwant October 23, 2008 at 10:25 am
thanx 4 such easy and effective defitions
Reply
Pankaj October 22, 2008 at 11:13 am
Hi Romi-
BR- 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
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-/
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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
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
Romi October 20, 2008 at 5:12 pm
what is the difference between repo rate & bank rate because looking at the
definition mentioned above, it is contradicting.
Reply
Hi Romi,
Repo Rate: Rate at which commercial banks borrow funds from
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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
priyanka October 18, 2008 at 11:12 am
pls tell me the relation between bank and plr,slr,crr,rr,rrr?
Reply
Manish Gandhi October 17, 2008 at 9:59 pm
how export & import affect to INR
Reply
Manish Gandhi October 17, 2008 at 9:23 pm
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
Harjeet singh 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
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Harshdip Singh October 15, 2008 at 11:54 am
great n simple..please specify current rates
Reply
Dhaval Mehta 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
Jay October 12, 2008 at 1:07 pm
Really Ive got good explanations for these REPO,Reverse REPO, CRR,
SLR
Thanxxxxxxxxxxxxxxxxx
Reply
Lokesh swarankar October 7, 2008 at 4:30 pm
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
Rakesh October 6, 2008 at 6:41 pm
127 of 139 5/9/2014 12:27 AM

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
sambhav kumar October 5, 2008 at 11:19 pm
what is difference between reverse repo & bank rate
Reply
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
ashu August 17, 2010 at 4:40 pm
YES Country needs huge funds or its development or

clearing its loans to foreign agencies urgently.
128 of 139 5/9/2014 12:27 AM

Upmanyu Moghe October 2, 2008 at 3:27 pm
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
umesh September 25, 2008 at 3:37 pm
hi
thanks for giving such basic information
Reply
navneet September 24, 2008 at 5:06 pm
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
Tathagata Maiti 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
129 of 139 5/9/2014 12:27 AM

MadhuSudhan August 12, 2008 at 11:54 am
thank you for your detail explanation .

Thanks.
Reply
Anu 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
Mallikarjuna Reddy T July 30, 2008 at 6:50 pm
what is Gold ETFs? How does it works?

ETFs effeted wirh gold rate or not?
Reply
Abhishek Bafna 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
bhanu July 8, 2008 at 8:38 am
jhlj /kh J:j:j:LMh;Lm:lh/lhdf .h
130 of 139 5/9/2014 12:27 AM

Reply
sushil kumar 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
Monika Madane July 4, 2008 at 6:00 pm
sir please explain me the causes of inflation in worldand in specialy in

india????
Reply
Monika Madane July 4, 2008 at 5:57 pm

Thanks in advance..
Reply
Chanda June 17, 2008 at 1:24 pm

Thanks in advance..
Reply
131 of 139 5/9/2014 12:27 AM

nandan 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
ashu 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
Vanshdeep 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
Pradeep October 1, 2009 at 10:52 am
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
132 of 139 5/9/2014 12:27 AM

Srinu 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
Surge Research Support 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
133 of 139 5/9/2014 12:27 AM

samik dasgupta 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
AADESH SRIVASTAVA 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
MANAS BAIDYA 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
iasmentor March 16, 2008 at 3:26 pm
Stock market is a place where the shares of companies are bought and
134 of 139 5/9/2014 12:27 AM

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
sir.is base rate and rate of interest is same .if different then
explain it
Reply
piyush January 25, 2013 at 12:45 am
plzease tell more elaborately about bank rate and repurchase rate
Reply
Mukul Sharma January 29, 2013 at 12:04 pm
Dear Piyush, already a lot has been written on this topic

by me. If still you have some questions, please let me
know.
sahana February 27, 2008 at 11:46 pm
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
135 of 139 5/9/2014 12:27 AM

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
susanta halder December 24, 2013 at 1:07 pm
hello sir i prepared myself for bank interview so please mail me

banking interview questions and answer.
Reply
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Repo, Reverse Repo, Bank

Repo (Repurchase) Rate

Reverse Repo Rate

This is the exact opposite of repo rate.

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February 11, 2008 in Doubts and questions.

VAT and refund issues Impact of Capital Inflows on Exchange Rate,

533 thoughts on Repo, Reverse Repo, Bank Rate, Call Rate,

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April 30, 2014 at 12:23 pm

sandeep rawat April 15, 2014 at 10:07 am

praful January 3, 2014 at 9:33 pm

Jitendra Gautam December 30, 2013 at 11:53 am

alisha December 27, 2013 at 2:22 pm

hi sir my question tht hw I prepare 4 interview

4 of 139 5/9/2014 12:27 AM

priya December 22, 2013 at 11:29 am

Sir please send me material in hindi medium for economics. I am preparing

jitesh December 15, 2013 at 11:58 am

abhijit shah December 13, 2013 at 9:31 am

abhijit shah December 13, 2013 at 9:32 am

sir m preparing for mba group discussion interviews and planning to

Dharmendra Prasad November 29, 2013 at 1:57 pm

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Sandeep Kumar November 7, 2013 at 8:31 pm

Sir please send me material in hindi medium for economics. I am preparing

Amandeep Singh November 4, 2013 at 6:52 pm

priyanka December 15, 2013 at 8:57 pm

6 of 139 5/9/2014 12:27 AM

Vikram October 29, 2013 at 10:25 pm

Grt I was stuck to understand IS,LM curve due to these terminologies.. I

Vikram October 29, 2013 at 10:26 pm

Pardeep kumar October 15, 2013 at 9:10 pm

Plz send a copy at my email id

Tousif Mokashi October 12, 2013 at 8:19 pm

santosh October 4, 2013 at 1:43 pm

Thank you sir.

7 of 139 5/9/2014 12:27 AM

prashant tripathi October 2, 2013 at 2:59 pm

Ajay September 28, 2013 at 2:57 pm

pls send me financial and general awareness

Kiran September 24, 2013 at 4:17 pm

Ankur September 21, 2013 at 4:35 pm

ram September 20, 2013 at 12:04 pm

8 of 139 5/9/2014 12:27 AM

Gaurav September 8, 2013 at 2:29 am

i have searched so many sites to get this info.never before it was

Mukul Sharma September 14, 2013 at 11:19 pm

Thanks Gaurav for your appreciation

Yasar ali September 2, 2013 at 12:53 am

Thank q sir..i m always confuse between these economic terms

Yasar ali September 2, 2013 at 8:03 pm

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Mukul Sharma September 14, 2013 at 11:20 pm

Pleasure is all mine Yasir

aparna khsandai August 25, 2013 at 12:41 am

nimish upadhyaya September 7, 2013 at 10:48 am

Mukul Sharma September 14, 2013 at 11:20 pm