What is SLR, Repo Rate, Reverse Repo Rate, and Cash Reserve Rate

 CRR, SLR, Repo Rate & Reverse Repo Rate - Hello friends, in today's article we are going to talk about Bank Rate, Repo Rate, Reverse Repo Rate and Cash Reserve Rate, such as what is the bank rate, whatever is on us Affects, what is repo rate, what is reverse repo rate, what is CRR and we are going to know in detail about all these in this article. After reading this article you do not need to read another article about it. So definitely read this article till the end. So let's just start.

What is SLR, Repo Rate, Reverse Repo Rate, and Cash Reserve Rate

1. What is repo rate?

Repo Rate - When we need money, we take bank loan. Instead, we pay interest to the bank. Similarly, the bank also needs a lot of money for its needs or daily operations. For this, banks take loans from the Reserve Bank of India. The rate at which banks pay interest to the Reserve Bank on this loan is called the repo rate. In simple words, Repo Rate means the rate of loan given by the Reserve Bank to other banks.

What will be the effect of repo rate on bank and general public

      See, if the Reserve Bank reduces the Repo Rate, then the bank gets a loan at a lower rate of interest, and the bank also gives interest to its customers at a lower rate, due to which people take a large amount of loan, but the bank increases it by the RBI. He has to take loan on higher interest and he also gives loan to his customer at higher interest rate due to which people take less loan.

2. What is Reverse Repo Rate? 

Reverse Repo Rate  - When the amount is left with the banks after the day's work, then keep that amount in the Reserve Bank of India. He pays interest on this amount. The rate at which the Reserve Bank of India pays interest on this amount is called Reverse Repo Rate.

What is the effect of reverse repo rate on the bank and the general public

    When the amount of cash in the market increases, the possibility of inflation increases in the market. Therefore, to remove cash from the market, the bank increases the RRR so that the bank deposits its money with the Reserve Bank in order to get more interest. So that the bank can distribute its cash in the market in less quantity and the amount of cash in the market decreases.

3. What is Cash Reserve Ratio?

  Cash Reserve Ratio - Every country's central bank has its own rules, similarly the Reserve Bank also has a rule, every bank has to keep a part of its total deposits with the Reserve Bank, this is the Cash Reserve Ratio. ) says. Which can be used in the payment of the customers at the time of bankruptcy etc. of the bank.

What is the effect of Cash Reserve Ratio on the bank and the general public: –

    If the Cash Reserve Ratio increases, then the working banks have to keep more amount of cash with the Reserve Bank, so that these banks are able to give minimum loans to traders and general public. But if the cash reserve ratio decreases, the cash flow increases. RBI makes changes in this when there is an immediate effect on the liquidity of cash in the market.

4. What is Statutory Liquidity Ratio?

   Statutory Liquidity Ratio In Hindi - SLR is used to keep the liquidity of cash under control. When the RBI wants to reduce the liquidity of cash without changing the interest rates, it increases the Statutory Liquidity Ratio (Statutory Liquidity Ratio), this leaves banks with less money to give.

        In the Statutory Liquidity Ratio, banks are required to keep some part of their deposits with them before issuing loans against their deposits. Statutory Liquidity Ratio can be in any form like cash, gold reserves, government securities.

What is the effect of Statutory Liquidity Ratio on the bank and the general public

      Statutory Liquidity Ratio controls the ability of banks to give loans. If a bank gets stuck in a difficult situation, the Reserve Bank can give some amount of money to the customers with the help of Statutory Liquidity Ratio.

Friends, I hope you have liked this article of mine "What is SLR, Repo Rate, Reverse Repo Rate, and Cash Reserve Rate". If there is any answer question related to this, then definitely ask it in the comment. Do share it with your friends and on social media platforms.

Location: India

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