Bank Rate : What is Bank Rate?

RBI Bank Rate | Banking Awareness

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Bank Rate
Posted by Admin on September 4th, 2011 | 10 Comments
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What is Bank rate? Bank Rate is the rate at which central bank of the country, in India it is the Reserve Bank of India (RBI), allows finance/liquidity to commercial/scheduled banks within the territory of India. RBI uses Bank Rate as a tool for short-term measures. Any upward revision in Bank Rate is an indication that banks should also increase the deposit rates as well as the Prime Lending Rate. Any revision in the Bank rate indicates more or less interest on your deposits and also an increase or decrease in your EMI. What is Bank Rate (Non Bankers Point of View) ? This is the rate at which RBI lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up, and If the bank rate goes down, long-term interest rates also tend to move down. Thus, it can said that in case bank rate is hiked, in all likelihood banks will hikes their own lending rates to ensure and they continue to make a profit. Present Bank Rate of RBI: 875% [As of October 29, 2013]
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Bank Rate : What is Bank Rate? RBI Bank Rate | Banking Awareness

http://www.bankingawareness.com/banking-gk/bank-rate/

RBI Cuts Bank Rate, MSF rate by 50 bps to 9% to improve liquidity Cash Reserve Ratio Highlights of RBIs mid-quarter monetary policy review Zemanta 9 Comments

1.

Art says: September 8, 2011 at 5:13 pm Major enthusiast of this website, quite a few your blog posts have definitely helped me out. Looking towards upgrades! Reply

2.

Saroj says: November 30, 2011 at 8:40 am Sir, Please tell me what exactly difference between Repo Rate and Bank Rate. Mai hamesha hi in dono k bich confused rehta hu. Reply

3.

Gayathri Kola826 says: July 2, 2012 at 11:22 am repo rate and bank rates are change in what time..? Reply Suvechchha Saha says: July 2, 2012 at 11:35 am according to RBIs decision. Reply

4.

Pramodmp says: July 6, 2012 at 4:16 pm how it increases an d decreases the bank rate Reply

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Bank Rate : What is Bank Rate? RBI Bank Rate | Banking Awareness

http://www.bankingawareness.com/banking-gk/bank-rate/

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Sk1987 says: August 8, 2012 at 3:42 pm shobha Reply

6.

Rvkkurup says: March 8, 2013 at 10:38 pm bank rate: 8.75% Reply

7.

Rvkkurup says: March 8, 2013 at 10:42 pm please tell what is the diff b/w BANK RATE & RIPO RTE Reply

8.

Arunrvk says: March 8, 2013 at 10:48 pm Repo or Repurchase 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. 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, 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. Reply

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Bank Rate : What is Bank Rate? RBI Bank Rate | Banking Awareness

http://www.bankingawareness.com/banking-gk/bank-rate/

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