REPO RAtE

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Sunshine

Sunshine (Querist)
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05 May 2011 What is repo rate and reverse repo rate..please explain...thankssssssssss

CA Amit Talada

CA Amit Talada (Expert)
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05 May 2011 Repo rate is the rate at which RBI lends money to Scheduled banks. Reverse repo rate is the rate at which RBI borrows money from Banks.

currently, repo is increased to 7.25% from 6.75% & Reverse repo is increased from 5.75% to 6.25%...so RBI takes interest at 7.25% and gives interest 6.25% to banks for deposits with rbi....

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Sunshine

Sunshine (Querist)
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05 May 2011 Thanks for the reply sir...please temme what is the difference between repo rate and bank rate?? just that repo rate is specifically for schedule banks?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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05 May 2011 ( Humour )

It seems right now you are studying -

STRUGGLING FIGHTING MANAGEMENT ( SFM ).

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Bank Rate is a short term finance to commercial banks by RBI.

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The banks are required to alter their deposit rates in line with the Bank Rate.

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Repo Rate is also a rate decided by RBI for short term finance to banks which is based on present economic factors.

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Both look similar but Deposit Rates change when Bank Rate Changes. In Repo-Rate it is not so.

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Bank Rate is a prime lending rate.

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Repo-rate is not prime lending rate.

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Sunshine

Sunshine (Querist)
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06 May 2011 Thank u sir...

Please throw a bit if more light on the difference between bank rate and repo rate...

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