Kerala Banking

What is a Repo Rate?

 

Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive
CRR Rate in India

Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.

Relation between Inflation and Bank interest Rates

Now a days, you might have heard lot of these terms and usage on inflation and the bank interest rates. We are trying to make it simple for you to understand the relation between inflation and bank interest rates in India.

Bank interest rate depends on many other factors, out of that the major one is inflation. Whenever you see an increase on inflation, there will be an increase of interest rate also.

 

What is Inflation?

Inflation is defined as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are less Goods and more buyers, this will result in increase in the price of Goods, since there is more demand and less supply of the goods.

What is a Personal Loan & How to Apply for it?
Car Loans in India
Home Loan Rate in India
Home Loan Terms
Are you Eligible for Home Loan? Find it Yourself
Inflation vs Interest Rates
What is CRR Rate?
What is a Repo Rate?
What is a Reverse Repo Rate?
What is SLR Rate?
What is Inflation?
What is Deflation?
What are the effects of Deflation?
What is Deflationary Spiral?
What are IIP numbers?
IIP data and Stock Markets
When are the IIP numbers published?
Tracking Growth using GDP & IIP data
Personal Loan vs Mortgage Loans
How to Decice on your Home Loan tenure?
What is LTV?
What is Amortising Loan?

 

Related Topics

What is a Personal Loan & How to Apply for it?
Car Loans in India
Home Loan Rate in India
Home Loan Terms
Are you Eligible for Home Loan? Find it Yourself
Inflation vs Interest Rates
What is CRR Rate?
What is a Repo Rate?
What is a Reverse Repo Rate?
What is SLR Rate?
What is Inflation?
What is Deflation?
What are the effects of Deflation?
What is Deflationary Spiral?
What are IIP numbers?
IIP data and Stock Markets
When are the IIP numbers published?
Tracking Growth using GDP & IIP data
Personal Loan vs Mortgage Loans
How to Decice on your Home Loan tenure?
What is LTV?
What is Amortising Loan?

 

 

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