CRR Rate in IndiaCash reserve Ratio (CRR) is the amount of funds that thebanks have to keep with RBI. If RBI decides to increasethe percent of this, the available amount with the bankscomes down. RBI is using this method (increase of CRRrate), to drain out the excessive money from the banks. S
S What is Bank rate? Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. Any upward revision in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Prime Lending Rate. This any revision in the Bank rate indicates could mean more or less interest on your deposits and also an increase or decrease in your EMI.
What is a Repo Rate? Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive.
REVERSE REPO RATEReverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. Banks are always happy to lend money to RBI since their money are in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. It can cause the money to be drawn out of the banking system. Due to this fine tuning of RBI using its tools of CRR, Bank Rate, Repo Rate and Reverse Repo rate our banks adjust their lending or investment rates for common man.
Statutory Liquidity RatioSLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit.
What are Mutual Funds?What exactly is a Mutual fund ? I am sure that you have heard about Mutual Fund investments, buy what exactly is a Mutual fund investment? As simple, Mutual fund is like an insurance policy. There are accumulation and collection of many different types of shares. It is when investors together want to buy securites as a group, this fund can be called a mutual fund. Each and every investor of this group has a proportional stake in the shares based on the amount he has contributed
Bank Rate6.00% Cash Reserve Ratio (CRR)6.00% Statutory Liquidity Ratio (SLR)25% Reverse Repo Rate 5.25% Repo Rate 6.25%THIS IS UPDATED ON 4NOV.2010