Current SLR, CRR, RBI Repo Rate, Reverse Repo, Latest, histo... moz-extension://40f56346-dc14-42fd-a747-9ca6c21f32df/read...
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Current SLR, CRR, RBI Repo Rate, Reverse Repo,
Latest, historical base rate chart
6 - 7 minutes
Latest RBI Bank Rates in Indian Banking - 2024
SLR Rate CRR MSF Repo Rate Reverse Repo Rate Base Rate
18% 4.5% 6.75% 6.5% 3.35% 9.10% - 10.4%
Repo rate also known as the benchmark interest rate is the rate at which
the RBI lends money to the banks for a short term. When the repo rate
increases, borrowing from RBI becomes more expensive. If 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. Current repo rate is 6.5%
Reverse Repo rate is the short term borrowing rate at which RBI borrows
money from banks. The Reserve bank uses this tool when it feels there is
too much money floating in the banking system. An increase in the
reverse repo rate means that the banks will get a higher rate of interest
from RBI. As a result, banks prefer to lend their money to RBI which is
always safe instead of lending it others (people, companies etc) which is
always risky.
Repo Rate signifies the rate at which liquidity is injected in the banking
system by RBI, whereas Reverse Repo rate signifies the rate at which the
central bank absorbs liquidity from the banks.
RBI joined other central banks and slashed the repo rate, reverse repo
rate and CRR to help maintain stability as a response to the Corona Virus
crisis. In April 2020, RBI cut the reverse repo rate so banks will get lower
interest rate which will push them to give out more loans to the general
public and companies. In May 2020, they slashed repo and reverse repo
rate again. RBI also extended the moratorium on payment of loans by
another three months till August.
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RBI Policy Rates Chart
Policy Rates
Source: rbi.org.in
10
8
Percentage
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SLR Rate, CRR Chart
Reserve Ratios
Source: rbi.org.in
30
20
Percentage
CRR - Cash Reserve Ratio - Banks in India are required to hold a certain
proportion of their deposits in the form of cash. However Banks don't
hold these as cash with themselves, they deposit such cash(aka currency
chests) with Reserve Bank of India , which is considered as equivalent to
holding cash with themselves. This minimum ratio (that is the part of the
total deposits to be held as cash) is stipulated by the RBI and is known as
the CRR or Cash Reserve Ratio.
When a bank's deposits increase by Rs100, and if the cash reserve ratio is
9%, the banks will have to hold Rs. 9 with RBI and the bank will be able
to use only Rs 91 for investments and lending, credit purpose. Therefore,
higher the ratio, the lower is the amount that banks will be able to use
for lending and investment. This power of Reserve bank of India to
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reduce the lendable amount by increasing the CRR, makes it an
instrument in the hands of a central bank through which it can control
the amount that banks lend. Thus, it is a tool used by RBI to control
liquidity in the banking system.
SLR - Statutory Liquidity Ratio - Every bank is required to maintain at the
close of business every day, a minimum proportion of their Net Demand
and Time Liabilities as liquid assets in the form of cash, gold and un-
encumbered approved securities. The ratio of liquid assets to demand
and time liabilities is known as Statutory Liquidity Ratio (SLR). RBI is
empowered to increase this ratio up to 40%. An increase in SLR also
restricts the bank's leverage position to pump more money into the
economy.
Net Demand Liabilities - Bank accounts from which you can withdraw
your money at any time like your savings accounts and current account.
Time Liabilities - Bank accounts where you cannot immediately
withdraw your money but have to wait for certain period. e.g. Fixed
deposit accounts.
Call Rate - Inter bank borrowing rate - Interest Rate paid by the banks for
lending and borrowing funds with maturity period ranging from one day
to 14 days. Call money market deals with extremely short term lending
between banks themselves. After Lehman Brothers went bankrupt Call
Rate sky rocketed to such an insane level that banks stopped lending to
other banks.
MSF - Marginal Standing facility - It is a special window for banks to
borrow from RBI against approved government securities in an
emergency situation like an acute cash shortage. MSF rate is higher then
Repo rate. Current MSF Rate:
Bank Rate - This is the long term rate(Repo rate is for short term) at
which central bank (RBI) lends money to other banks or financial
institutions. Bank rate is not used by RBI for monetary management now.
It is now same as the MSF rate. Current bank rate is
Updated 08-Jun-2024
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