CRR(Cash Reserve Ratio):Cash reserve Ratio (CRR) is the amount of Cash(liquid cash like gold) that the banks

have to keep with RBI. This Ratio is basically to secure solvency of the bank and to drain out the excessive money from the banks. If RBI decides to increase the percent of this, the available amount with the banks comes down and if RBI reduce the CRR then available amount with Banks increased and they are able to lend more.Present rate is (5.75% today 29.01.10) announced Repo Rate:Repo rate is the rate at which our banks borrow rupees from RBI. This facility is for short term measure and to fill gaps between demand and supply of money in a bank .when a bank is short of funds they they borrow from bank at repo rate and if bank has a surplus fund then the deposit the funds with RBI and earn at Reverse repo rate .present rate is 4.75 as on 29.01.2010) Reverse Repo rate is the rate which is paid by RBI to banks on Deposit of funds with 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.To borrow from RBi bank have to submit liquid bonds /Govt Bonds as collateral security ,so this facility is a short term gap filling facility and bank does not use this facility to Lend more to their customers. present rate is 3.25 as on 29.01.2010) SLR((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.Generally this mandatory ration is complied by investing in Govt bonds.present rate of SLR is 25 %.(as on 29.01.2010)But Banks average is 27.5 % ,the reason behind it is that in deficit Budgeting ,Govt landing is more so they borrow money from banks by selling their bonds to banks.so banks have invested more than required percentage and use these excess bonds as collateral security ( over and above SLR )to avail short term Funds from the RBI at Repo rate.

Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the Money supply

BPS- It is an acronym for basis point and is used to indicate changes in rate of interest and other financial instruments. 1 basis point is equal to 0.01%. So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%. 9.50% (w.e.f. close of business of 13/02/2012) Increased from 6.00% to 9.50% which was continuing since 29/04/2003

Bank Rate

Cash Reserve Ratio (CRR)

4.75% (wef Decreased from 10/03/2012) - 5.50%which was continuing announced on 24/01/2012 since 24/01/2012 Decreased from 25% which was continuing since 07/11/2009

Statutory Liquidity Ratio (SLR)

24%(w.e.f. 18/12/2010)

Repo Rate under LAF

Increased from 8.50% (w.e.f. 8.25% which 25/10/2011) was continuing since 16/09/2011 Increased from 7.50% (w.e.f. 7.25% which 25/10/2011) was continuing since 16/09/2011

Reverse Repo Rate under LAF *

Reverse Report rate was an independent rate till 03/05/2011. However, in the monetary policy announced on 03/05/2011, RBI has decided that now onwards the Reverse Repo Rate will not be announced separately, but will be linked to Repo rate and it will always be 100 bps below the Repo rate (till RBI decides to delink the same)