Give the meaning of the following:

i. Repo rate

ii. Reverse repo rate

iii. Borrowing rate

iv. Lending rate

Asked by Topperlearning User | 18th Apr, 2016, 12:21: PM

Expert Answer:

  1. Repo rate is the rate of interest at which Commercial bank can raise short term loans from the RBI for a period of 1-14 days.
  2. Reverse repo rate is the rate at which Commercial banks can keep their certain portion of surplus amount with RBI for short period.
  3. Rate of interest offered by the Commercial banks to deposit holders is called the borrowing rate.
  4. Rate at which Commercial banks lend out their reserves to investors is called the lending rate.

Answered by  | 18th Apr, 2016, 02:21: PM