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Monetary policy is the sets of policies and guidelines formulated by the central bank of a county to regulate the supply of funds in the economy. The Reserve Bank of India (RBI), the central bank of India, is responsible for formulating and implementing the monetary policy across the country.
Marginal Standing Facility (MSF): “Marginal Standing Facility (MSF) refers to the collateralised short term borrowing facility for the scheduled commercial banks and other financial institutions from the Reserve Bank of India (RBI).” In other words, MSF is an instrument for the commercial banks and other financial institutions to avail the short term (overnight or one … Read more
In this lesson, we will discuss one of the important monetary instruments of the Reserve Bank of India. You will be able to learn the following terms by the end of this lesson. What is Bank Rate? Usage of Bank Rate Repo Rate vs Bank Rate Bank Rate: “The Bank Rate is the rate of … Read more
Statutory Liquidity Ratio (SLR): “The Statutory Liquidity Ratio (SLR) refers to the certain proportion of NDTL (Net Demand and Time Liability) of the commercial banks that has to be maintained with itself in form of liquid assets such as cash, gold or government approved securities by the commercial banks.” The Reserve Bank of India (RBI), … Read more
Cash Reserve Ratio (CRR): “Cash Reserve Ratio (CRR) refers to the certain proportion of Net Demand and Time Liability (NDTL) of the commercial banks which has to be reserved in the form of cash (liquid asset) under the supervision of RBI as per Section 42 of the RBI Act” In other words, RBI has … Read more
Table of Content: What is Repo Rate or Repurchase Option Agreement Rate? What is Reverse Repo Rate? Explained with example. Effect of Repo Rate and Reverse Repo Rate on the rate of Inflation. How does the Repo Rate and Reverse Repo Rate effect on Growth Rate? What is Repo Rate? The term ‘Repo’ refers to … Read more