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    Bank Rate, Also Referred To As The Discount Rate in American English

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    Alphy Thomas
    The document discusses various concepts related to central banking and monetary policy: 1) Repo rate is the rate at which commercial banks borrow funds from the central bank to meet demand for loans. The central bank can increase or decrease the repo rate to make borrowing cheaper or more expensive for banks. 2) Reverse repo rate is the rate at which the central bank borrows funds from commercial banks. Increasing the reverse repo rate makes it more lucrative for banks to park funds with the central bank rather than lend them out. 3) Time deposits are bank deposits that cannot be withdrawn for a specified term, with longer terms offering higher interest yields. They provide liquidity to banks while generating returns for depositors.

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    Bank Rate, Also Referred To As The Discount Rate in American English

    Uploaded by

    Alphy Thomas
    41 views4 pages
    The document discusses various concepts related to central banking and monetary policy: 1) Repo rate is the rate at which commercial banks borrow funds from the central bank to meet demand for loans. The central bank can increase or decrease the repo rate to make borrowing cheaper or more expensive for banks. 2) Reverse repo rate is the rate at which the central bank borrows funds from commercial banks. Increasing the reverse repo rate makes it more lucrative for banks to park funds with the central bank rather than lend them out. 3) Time deposits are bank deposits that cannot be withdrawn for a specified term, with longer terms offering higher interest yields. They provide liquidity to banks while generating returns for depositors.

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    The document discusses various concepts related to central banking and monetary policy: 1) Repo rate is the rate at which commercial banks borrow funds from the central bank to meet demand for loans. The central bank can increase or decrease the repo rate to make borrowing cheaper or more expensive for banks. 2) Reverse repo rate is the rate at which the central bank borrows funds from commercial banks. Increasing the reverse repo rate makes it more lucrative for banks to park funds with the central bank rather than lend them out. 3) Time deposits are bank deposits that cannot be withdrawn for a specified term, with longer terms offering higher interest yields. They provide liquidity to banks while generating returns for depositors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    41 views4 pages

    Bank Rate, Also Referred To As The Discount Rate in American English

    Uploaded by

    Alphy Thomas
    The document discusses various concepts related to central banking and monetary policy: 1) Repo rate is the rate at which commercial banks borrow funds from the central bank to meet demand for loans. The central bank can increase or decrease the repo rate to make borrowing cheaper or more expensive for banks. 2) Reverse repo rate is the rate at which the central bank borrows funds from commercial banks. Increasing the reverse repo rate makes it more lucrative for banks to park funds with the central bank rather than lend them out. 3) Time deposits are bank deposits that cannot be withdrawn for a specified term, with longer terms offering higher interest yields. They provide liquidity to banks while generating returns for depositors.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    The discount rate at which a central bank repurchases government securities from the commercial banks, depending

    on the level of money supply it decides to maintain in the country's monetary system. To temporarily expand the
    money supply, the central bank decreases repo rates (so that banks can swap their holdings of government securities
    for cash). To contract the money supply it increases the repo rates. Alternatively, the central bank decides on a desired
    level of money supply and lets the market determine the appropriate repo rate. Repo is short for repossession.

    Repo rate is the rate at which banks borrow funds from the RBI to meet the gap between the
    demand they are facing for money (loans) and how much they have on hand to lend.
    If the RBI wants to make it more expensive for the banks to borrow money, it increases the repo
    rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.
    Reverse Repo Rate
    This is the exact opposite of repo rate.
    The rate at which RBI borrows money from the banks (or banks lend money to the RBI) is termed
    the reverse repo rate. The RBI uses this tool when it feels there is too much money floating in the
    banking system
    If the reverse repo rate is increased, it means the RBI will borrow money from the bank and offer
    them a lucrative rate of interest. As a result, banks would prefer to keep their money with the RBI
    (which is absolutely risk free) instead of lending it out (this option comes with a certain amount of
    risk)
    Bank rate, also referred to as the discount rate in American English[1], is the rate of interest which
    a central bank charges on the loans and advances to a commercial bank.
    Whenever a bank has a shortage of funds they can typically borrow it from the central bank based on
    the monetary policy of the country.
    The borrowing is commonly done via repos where the repo rate is the rate at which the central bank
    lends short-term money to the banks against securities. A reduction in the repo rate will help banks to
    get money at a cheaper rate. When the repo rate increases borrowing from the central bank becomes
    more expensive. It is more applicable when there is a liquidity crunch in the market.
    The reverse repo rate is the rate at which the banks can park surplus funds with reserve bank, while
    the repo rate is the rate at which the banks borrow from the central bank. It is mostly done when there
    is surplus liquidity in the marke
    A time deposit (also known as a certificate of deposit in the United States, a term deposit,
    particularly in Canada, Australia and New Zealand; a bond in the United Kingdom; Fixed
    Deposits in India and in some other countries) is a money deposit at a banking institution that cannot
    be withdrawn for a certain "term" or period of time (unless a penalty is paid) [citation needed]. When the term
    is over it can be withdrawn or it can be held for another term. Generally speaking, the longer the term
    the better the yield on the money. In its strict sense, certificate deposit is different from that of time
    deposit in terms of its negotiability: CDs are negotiable and can be rediscounted when the holder
    needs some liquidity, while time deposits must be kept until maturity
    A time deposit is an interest-bearing bank deposit that has a specified date of maturity.A deposit of
    funds in a savings institution is made under an agreement stipulating that (a) the funds must be kept
    on deposit for a stated period of time, or (b) the institution may require a minimum period of
    notification before a withdrawal is made.
    A sum of money paid by a person (called the depositor) to another person on condition that the depositor may
    call for repayment of an equal sum of money (but not the same notes or coins) either on demand or at a time or
    in circumstances settled by agreement between the depositor and the person receiving the deposit. A deposit

    repayable on demand is called a demand deposit. The person receiving the deposit may offer to pay interest on
    it or may offer to provide banking services. In many instances of making deposits (e.g. in making a deposit in a
    current account at a bank) the depositor is entitled to call for repayment of any sum of money less than the sum
    deposited. In other instances (e.g. a deposit in exchange for a certificate of deposit) only the entire amount
    deposited may be repaid. If banking services are provided then the deposited money may be paid to any person
    to whom the depositor gives a right to payment (e.g. by issuing a cheque). 2. To pay money as a deposit in sense
    1. 3. A sum of money paid, as security for the performance of an obligation, on condition that it will be repaid if
    the obligation is performed. 4. A sum of money paid by a person to reserve for that person goods or services
    offered for sale and representing part of the purchase price of the goods or services.

    27 August 2013 Current Affairs


    Malala Yousafzai Wins International Childrens Peace Prize
    On 27 August Pakistani school pupil and education activist Malala Yousafzai won the International
    Childrens Peace Prize 2013. The International Childrens Peace Prize is an initiative of the
    Amsterdem-based Dutch KidsRights Foundation. It was launched in the year 2005 by former Soviet
    President Mikhail Gorbachev, when he chaired the Summit of Nobel Peace Laureates in Rome. Since
    then, the prize has been awarded every year by a Nobel Peace Prize Laureate. The prize is
    presented annually to an exceptional child, whose courageous or otherwise remarkable actions have
    made a difference in countering problems, which affect children around the world.

    Madonna Tops Forbes 2013 Highest-Paid Celebrities List


    On 27 August According to Forbes 2013 list of highest-paid celebrities Madonna was the worlds
    highest-earning celebrity in 2012-13.Madonna made $US125 million between June 2012 and June
    2013.Veteran film director Steven Spielberg took second place in the list, while musical talent show
    mogul Simon Cowell tied for third with Fifty Shades of Grey author EL James and disc jockey Howard
    Stern.

    Mandela Is The First Recipient Of Mahathir Award For Global Peace


    On 27 August Former South African President Nelson Mandela was awarded the first Lifetime
    Campaigner for Peace and Freedom of the Mahathir Award for Global Peace .Current South African
    President Jacob Zuma received the award on behalf of Mandela, who is in a critical condition in a
    hospital in Pretoria.The Mahathir Award for Global Peace is a peace award instituted by the Mahathir
    Global Peace Foundation. The foundation was formed to contribute to worldwide peace
    efforts.Mahathir bin Mohamad is a Malaysian politician who was the fourth Prime Minister of Malaysia.
    He held the post for 22 years from 1981 to 2003, making him Malaysias longest serving Prime

    Read more: 27 August 2013 Current Affairs http://currentaffairs.freejobalert.com/27-august-2013current-affairs/5333/#ixzz2dTDWHT8w

    28 August 2013 Current Affairs


    Brigalia Bam Awarded with Gandhi Peace Prize

    On 28 August Brigalia Bam, former head of South Africas election body, received the prestigious
    Mahatma Gandhi International Award for Peace and Reconciliation her commitment to
    democracy.The award was created in 2003 to mark the centenary of a newspaper, Indian Opinion,
    published in South Africa by Gandhi. It was created in memory of Mahatma Gandhi who began his
    socio-political life in South Africa and struggled ceaselessly for justice and for peace and
    reconciliation.

    Indian-origin Cardiologist Named White House Fellow


    On 28 August Dr Kapil Parakh, an Indian-origin cardiologist working in Washington area, is among a
    dozen people chosen by the White House for its prestigious fellowship programme for 2013-14.Dr
    Parakh is the director of heart failure at the Johns Hopkins Bayview Medical Centre and assistant
    professor in the Departments of Medicine, Epidemiology, and Health Behaviour and Society.Dr
    Parakh is the co-founder of Health for America, a non-profit that mobilises youth to improve the health
    of communities through innovation while shaping the next generation of leaders.

    Scientists Discovered New Element 115


    An international team at the GSI research facility in Germany have confirmed the existence of a new
    element with atomic number 115, verifying earlier measurements performed by research groups in
    Russia. By bombarding a thin film of americium with calcium ions, the research team was able to
    measure photons in connection with the new elements alpha decay. Certain energies of the photons
    agreed with the expected energies for X-ray radiation, which is a fingerprint of a given element.The
    scientists have not named it yet but for time being it will be referred as, Ununpentium

    Read more: 28 August 2013 Current Affairs http://currentaffairs.freejobalert.com/28-august-2013current-affairs/5339/#ixzz2dTDbRejR

    26 August 2013 Current Affairs


    Lok Sabha Passed National Food Security Bill, 2013
    On 26 August Lok Sabha passed the National Food Security Bill, 2013.The Bill seeks to give legal
    rights to get subsidized grains every month to 67 percent of the overall population (of which 75
    percent is rural and 50 percent is urban population).A beneficiary will be entitled to 5 kg of rice, wheat
    or coarse cereals at Rs. 3, Rs. 2 and Re. 1 per kg a month, respectively.The beneficiaries will be
    identified by the States based on parameters prescribed by the Union government.Once the Bill gets
    its nod in the Rajya Sabha and Presidents accent, India will join the selected league of countries that
    guarantee food grants to a majority of its population.

    Rajya Sabha Passed The Marriage Laws (Amendment) Bill, 2010


    On 26 August the Rajya Sabha passed a bill to amend marriage laws to provide for irretrievable
    breakdown of marriage as a ground for divorce, subject to certain safeguards to the wife and affected
    children.The Marriage Laws (Amendment) Bill, 2010 was passed by voice vote. It seeks to amend the
    Hindu Marriage Act 1955 and the Special Marriages Act, 1954.Under the new bill, a provision has
    been made to restrict the grant of decree of divorce on the ground of irretrievable breakdown of

    marriage if the court is satisfied that adequate provision for the maintenance of children born out of
    the marriage has not been made consistently with the financial capacities of the parents.The bill
    allows wife to oppose grant of divorce on the ground that a dissolution of marriage will result in grave
    financial hardships. The court can also restrict grant of divorce if it is not satisfied about adequate
    provision for maintenance of children born of marriage.

    Read more: 26 August 2013 Current Affairs http://currentaffairs.freejobalert.com/26-august-2013current-affairs/5330/#ixzz2dTDjy3JS

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