Diff. between Bank Rate V/S Repo Rate..?

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Vikas Marele

Vikas Marele (Querist)
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21 March 2011 What is difference between Bank Rate & Repo rate.........?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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21 March 2011 in my opinion,Repo rate is the rate at which the RBI repurchase the
securities from the commercial banks for a short term
period.

But the discount or Bank rate is the rate at which the RBI
re discounts the bills of exchange of commercial banks

Vikas Marele

Vikas Marele (Querist)
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21 March 2011 Is there is any role of central bank is there related to bank rate.......?

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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21 March 2011 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.

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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21 March 2011 RBI play major roal in determination of Bank Rate & Repo rate.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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22 March 2011 i am agree with shri sisodiya ji statement "RBI play major roal in determination of Bank Rate & Repo rate.

regards,

Vikas Marele

Vikas Marele (Querist)
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22 March 2011 Thanks Ravi & Ramesh

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