what is difference between bank rate and reverse repo rate...I don't want any nonsense answer
Answers
In Banking or Finance,reverse repo rate refers to the rate at which the Reserve Bank of India(RBI) can take financial loan or borrow from the commercial banks.
Bank rate is the rate at which the RBI lends funds to the commercial banks without any kind of collateral security.
Explanation:
Reverse repo rate is practically opposite of the repo rate.It is the interest rate at which the RBI borrows from the commercial banks in the country or the rate at which commercial banks lend to RBI.On some occasions,the commercial banks can deposit some of their excess reserve money to the RBI usually for a brief time period.
On the other hand,bank rate refers to the interest rate at which RBI provides short term financial loans to commercial banks in the country without any kind of collateral security.Bank rate is generally crucial as it is an instrument used by central banks in most countries to regulate the macroeconomic conditions in the respective countries.A lower bank rate implies that commercial banks can lend from RBI at a lower interest rate leading to higher demand for liquidity through financial borrowing.
Answer:
Explanation:
The bank rate is the rate of interest charged by the apex bank by the commercial banks for lending the loan whereas Repo Rate is the interest rate charged on the repurchase of securities sold by the commercial banks. ... Repo rate is lower than the bank rate.