Banking terminology for upcoming IBPS RRB... 1. Bank Rate : - the interest rate at which the central bank lends money to commercial banks. current bank rate = 9%. 2. Repo Rate :- it is the rate at which the banks borrows rupees from RBI. current Repo rate is 8% 3. Reverse repo Rate :- it is the rate at which the RBI borrows money from commercial banks. current reverse repo rate is 7% ( which is always 1% less than to repo rate) 4. Cash Reserve Ratio:- it is the amount which banks have to keep with RBI. current CRR is 4%. ( it is useful for controlling money supply in the market) 5. Statutory liquidity ratio :- it is the amount which commercial banks need to maintain in the form of cash, gold or government securities before providing credit to its customers. current SLR is 22% ( it is decreased by 0.5% to increase money supply in the market) 6. Marginal standing facility:- it is the rate at which the banks borrow funds overnight from the RBI against approved government securities. it is always 1 % more to repo rate. current MSF is 9%. 7. Liquidity adjustment facility: - it is a monetary policy tool which allows banks to borrow money through repurchase agreements. it consists of repo rate and reverse repo rate operations.
Posted on: Mon, 08 Sep 2014 06:35:00 +0000
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