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?




Answers were Sorted based on User's Feedback



what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / aanchal sharma

both the rates are determined by rbi or central bank only.
Bank rate ir a rate at which RBI lend money to commercial
bank.
Repo rate is a rate at which commercial bank borrow from
RBI.
IN TERMS OF THEIR EFFECT ON LIQUIDITY OF MONEY THERE IS NO
DIFFERENCE BUT THEORITACALLY IN CASE OF REPO RATE
COMMERCIAL BANK HAS TO SELL SECURITIES TO RBI AND BORROW
MONEY WHEREAS IN CASE OF BANK RATE THERE IS NO SALE OF
SECURITIES.

Is This Answer Correct ?    132 Yes 48 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / rohit gangar

BANK RATE
The rate of interest which a central bank charges on the
loans and advances that it extend to commercial banks and
other intermediaries

REPO RATE
RATE AT WHICH BANKS BORROW FROM RBI BY SELLING SECURITIES
AND AT THE SAME TIME AGREEING TO REPURCHASE THEM AT LATE
DATE AT PREDETERMINED PRICE.

Is This Answer Correct ?    83 Yes 5 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / jitesh patle

IN CASE OF REPO RATE COMMERCIAL BANK HAS TO SELL SECURITIES
TO RBI AND BORROW MONEY WHEREAS IN CASE OF BANK RATE THERE
IS NO SALE OF SECURITIES.

Is This Answer Correct ?    84 Yes 12 No




what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / arvind kumar

Repo 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.
and
Bank rate, also referred to as the discount rate, is the
rate of interest which a central bank charges on the loans
and advances that it extends to commercial banks and other
financial intermediaries. Changes in the bank rate are
often used by central banks to control the money supply.

Is This Answer Correct ?    44 Yes 14 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / remya v.s

Both bank rate and repo rate serve the same purpose for
meeting the liquidity needs of the commercial banks.Both the
rates are determined by RBI in accordance with the money
supply in the market.The only difference between the two
are,in REPO RATE, there is sale of security to RBI on an
agreement to" repurchase" it at a future date at
predetermined price.That is why the term REPO means
"REPURCHASE AGREEMENT".Whereas in BANK RATE, there is no
such sale or repurchase agreement.It takes place as mere
lending of money to commercial banks at fixed rate ,i.e the
bank rate.

Is This Answer Correct ?    25 Yes 2 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / monty negi

bank rate:
bank rates means rbi lend money to commercial
banks for long period and in the repo rate rbi lend money
to commerical banks for a short- term period by purchasing
the securities.

Is This Answer Correct ?    23 Yes 3 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / rajni

Repo Rate - short for repurchase rate, is the rate at which
banks borrow money from RBI. In this, banks mortgage their
government securities and it is generally for a short term.

Bank rate is also the rate at which banks borrow from RBI
but in this there is no morgaging of securities involved. It
is a long term lending. Influenced by govt's monetary policies.
At present - Repo rate is 4.75%, Bank Rate - 6%

Is This Answer Correct ?    12 Yes 3 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / bharti

repo rate purely means a rate at which banks borrow funds
from RBI in case of need by selling its securities.
in case of bank rate is the rate at which banks borrow
funds from RBI but there is no sell of securities.

Is This Answer Correct ?    5 Yes 0 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / sakthidharan

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.

Banks make a profit by borrowing at a lower rate and lending
the same funds at a higher rate of interest. If the RBI
hikes the bank rate, the interest that a bank pays for
borrowing money (banks borrow money either from each other
or from the RBI) increases. It, in turn, hikes its own
lending rates to ensure it continues to make a profit.

Is This Answer Correct ?    5 Yes 1 No

what is the difference between repo rate and bank or discount rate ? and as discount rate are de..

Answer / amir farooq khan

bank rate means the rate at which rbi is prepared to lend
or to rediscount the bills of bank.it is a quantitative
method of credit control. currently it is 6%..whereas repo
rate is a rate at which commercial banks borrow from rbi by
selling secuities to rbi.currenly it is 5.25%

Is This Answer Correct ?    3 Yes 0 No

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