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The reverse repo rate is the rate at which banks park their short-term excess liquidity with the Central Bank, while the repo rate is the rate at which the Central Bank pumps in short-term liquidity into the system.

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14y ago
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10y ago

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 bank's 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.

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11y ago

In Repo rate there is need of securities submission. In Bank Rate, there is no need of Security submission.

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Q: What is the difference between bank rate and repo rate?
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Related questions

How many differences between repo rate and reverse repo rate?

Assuming the State Bank of India, the spread between repo rate and reverse repo rate has trended towards 1.00%.


What is a bank repo rate?

The Repo rate is the rate at which the central bank lends loans to its member banks.


What is the current repo rate and reverse repo rate in india?

The current Repo Rate is 6.5% and that of Reverse Repo Rate is 5.5%. While the Bank Rate is 6.00% ..


What is repo rate?

the repo rate is the rate that the reserve bank lends money to commercial banks


What is the current repo rate and reverse repo rate and bank rate by RBI in India?

As of October 12, 2010, according to the Reserve Bank of India... repo rate 6.00% reverse repo rate 5.00% overnight call money 6.24%


What is the meaning of reverse repo rate?

repo rate - is the interest rate that reserve bank use to charge commercial banks repo rate - is the interest rate that reserve bank uses to charge commercial banks


Repo and reverse repo?

Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers Reverse Repo Rate - is the reverse of repo rate and is the interest the central bank would pay its member banks.


What is repo rate and reverse repo rate of RBI?

Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers Reverse Repo Rate - is the reverse of repo rate and is the interest the central bank would pay its member banks.


Monetary policy of India?

means latest crr, repo rate,revers repo rate, bank rate ,slr


What is repo rate and reverse repo rate?

When banks have any shortage of funds, they can borrow it from Reserve Bank of India or from other banks. The rate at which the RBI lends money to commercial banks is called repo rate. The Reserve Bank parks its money with other banks at the reverse repo rate.


Repo rate and reverse repo rate?

When banks have any shortage of funds, they can borrow it from Reserve Bank of India or from other banks. The rate at which the RBI lends money to commercial banks is called repo rate. The Reserve Bank parks its money with other banks at the reverse repo rate.


What is meaning to Repo rate?

the no of times a husband sleeps with his wife is called repo rate