hi gys please answered the question what is main difference between bank rate and repo rate
Answers
Answer:
hlo....
the Bank rate means the rate of interest and Repo means the rate of paid
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Explanation:
Repo Rate and Bank Rate are the two most popular rates calculated for borrowing and lending activities carried on by commercial and central banks. They are the lending rates at which the Central Bank of India lends funds to commercial banks and other financial institutions. While both rates are short term tools used to control the cash flow in the market and are often mistaken to be one and the same, there is some noteworthy difference between the two.
Before we make a comparison about the repo rate and the bank rate, it is important to first understand what both these terms mean. Simply put, repo rate is the rate at which the RBI lends to commercial banks by purchasing securities while bank rate is the lending rate at which commercial banks can borrow from the RBI without providing any security. Both the terms have been explained in a descriptive manner in the subsequent sections, along with their comparisons.
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