Question

Difference between bank rate and repo rate

Answer 1

While the bank rate refers to the interest ratecharged by central bank on loans granted to commercial banks, overnight rate is the interest charged when banks borrow funds among themselves. When Bank Rate is increased by RBI, bank's borrowing costs increases which in return, reduces the supply of money in the market.

Answer 2

repo rate is concerned with short term lending by Central Bank to commercial bank and it is governed by the short-term interest ratewall paint rate is applicable to long term lending by the central bank and commercial bank and it is governed by long-term interest rate