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The banking system is the backbone of the economy of a country. The banks also play a crucial role in day to day life of the citizens.
Liquidity Adjustment Facility (LAF): “The Liquidity Adjustment Facility (LAF) is an instrument of monetary policy of the Reserve Bank of India through which commercial banks or other financial institutions or primary dealers manage their surplus funds as well as deficit of funds by Repurchase Option Agreement keeping their Government of India securities such as … Read more
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
