what is the difference between repo rate and bank or
discount rate ?
and
as discount rate are determined by central bank is repo rate
is determined by MPC monitary policy comittee?
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Repo Rate
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.
The main difference i8s that the Repo rate is charged on
short time. The time range is Few hours to 15 days
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.
| Is This Answer Correct ? | 4 Yes | 2 No |
Answer / yuju
Bank Rate- this is an interest rate that RBI charges to
commercial banks for providing them loans of long term nature.
Repo Rate- this is also interest rate that rbi charges to
commercial banks but for short term loans(approx. 18 days).
another point that differentiate repo rate from bank rate is
that , for taking this short term loan commercial banks has
to deposit some securities to RBI.thats why it is also
called discounting rate.
Reverse Repo- this is interest rate RBI provides to
commercial banks for their deposits with RBI.
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / sairam subramaniam
In both the cases, money flows from RBI to the Bank/
Financial Intermediary. But the difference might be in -
1) (REPO TRNSACTION)Sale of securities by banks to RBI and
an agreement to repurchase them.
(TRANSACTION USING BANK RATE) I'm not sure about sale of
securities.
2) (REPO TRANSACTIONS) are for short term money lending.
(BANK RATE TRANSACTIONS) are for long term money lending.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / sandeep bharadwaj
REPO RATE is a rate at which rbi or central bank purchases
securities from commercial banks.
BANK RATE is a rate at which rbi or central bank gives the
loan to commercial banks.
RESERVE REPO RATE is a rate at which rbi resale its
security to commercial banks.
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / srikanth reddy
THE RATE AT WHICH BANKS
BORROW MONEY FROM THE
CENTRAL BANK OF OUR COUNTRY
(RBI) FOR SHORT TIME
PERIOD.
THE RATE AT WHICH BANKS
BORROW MONEY FROM RBI FOR
LONG TIME PERIOD.
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / bhaskar guha
Repo rate is a repurchase agreement between RBI and commercial banks. It is a rate by which RBI provides loans and advances to commercial banks against securities .
On the other hand , Bank rate is a rate by which central bank provides loans to commercial banks for short term purpose.
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / sathish
Repo rate is the rate at which RBI lends money to
commercial banks for the SECURITIES. Presently it is 4.75%
Bank rate is the rate at which commercial bank borrows
money from RBI when it is short in cash.. Presently it is 6%
| Is This Answer Correct ? | 9 Yes | 11 No |
Answer / raju sharma
repo rate is the discount rate at which a central bank RBI
repurchases government securities from the commercial
banks , depending on the level of money supply it RBI
decides to maintain in the countrys monetary system. Bank
rate is basically prime rate set by the RBI. This is the
rate the RBIcharges commercial banks to borrow money on a
short term usually overnight basis.
| Is This Answer Correct ? | 0 Yes | 2 No |
Answer / pankaj kumar
bank rate:
rate at which central bank of a country lends money
to the country's commercial banks.
repo rate:
rate at which the banks can borrow money from a
central bank of the country in order to avoid scarcity of funds
| Is This Answer Correct ? | 9 Yes | 13 No |
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