The rate at which the RBI lends money to commercial banks is called repo rate

The rate at which the RBI lends money to commercial banks is called repo rate. It is an instrument of monetary policy. Whenever banks have any shortage of funds they can borrow from the RBI.

Reverse Repo rate is the rate at which the RBI borrows money from commercial banks

Reverse Repo rate is the rate at which the RBI borrows money from commercial banks. Banks are always happy to lend money to the RBI since their money are in safe hands with a good interest.

If the central bank decides to increase the CRR, the available amount with the banks comes down

What

is

CRR?

RBI cuts Repo rate by 50 bps (reduced from 8.50% to 8.00%). Reverse repo to be adjusted to 7.00%. Bank Rate and Marginal Standing Facility to 9.00%. No change in CRR (updated on 17/04/2012)

What is SLR ? or What is SLR Ratio or What is SLR Rate : (For Non Bankers) : SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some other approved securities to liabilities (deposits) It regulates the credit growth in India. Some non bankers also wrongly use SLR ratio or SLR Rate instead of Statutory Liquidity Ratio.
18-Dec.-2010 24.00 Announced on 16/12/2010 Mid-Quarter Monetary Policy Review: December 2010

The RBI cut interest rates on Tuesday for the first time in three years by an unexpectedly sharp 50 basis points to give a boost to flagging economic growth but warned that there is limited scope for further rate cuts. The Reserve Bank of India cut its policy repo rate to 8 percent, compared with expectations for a 25 basis point cut in a Reuters poll. Following are highlights from the monetary policy statement: POLICY MEASURES: * Cuts repo rate by 50 bps to 8.00 percent * Reverse repo rate falls to 7.00 percent * Cash reserve ratio unchanged at 4.75 percent * Raises borrowing limit of banks under marginal standing facility to 2 percent from 1 percent. POLICY STANCE: * Says modest growth slowdown, upside risks to inflation limit space for further reduction in policy rates * Policy stance aims to provide greater liquidity cushion to financial system

Ads By Google * Liquidity moving towards comfort zone, proactive steps will be taken to restore to comfort zone if needed FORECASTS * Baseline GDP growth forecast for 2012/13 at 7.3 percent * Baseline wholesale price index inflation projection for March 2013 at 6.5 percent * Money supply growth projected at 15 percent, credit growth at 17 percent and deposits at 16 percent in 2012/13 ECONOMY * Says current account deficit level unsustainable * Financing of current account deficit will continue to pose a major challenge * Risk of pass-through of administered prices into inflation limited on reduced corporate pricing power * Non-food manufactured products inflation expected to remain contained BANKING SECTOR * Says to issue final guidelines on implementation of Basel III capital regulations by April-end * To issue final guidelines on liquidity risk management and Basel III framework on liquidity standards by end-May 2012

Proposes to ban foreclosure charges/pre-payment penalties on floating interest rate home loans, to issue guidelines * Proposes banks should reduce their regulatory exposure ceiling in a single non-banking financial company, having gold loans to the extent of 50 percent or more of its total financial assets, to 7.5 percent from existing 10 percent of bank's capital funds * Proposes to set up a working group to assess feasibility of introducing more long-term fixed interest rate loan products by banks
PERCENTGE OF FDR (fixed depoit rte) 49%