1. RBI CURRENT RATES
(comparison with last year)
2011 – 2012 APRIL 23
& 2012 – 2013 April 17
Different rates in monetary policy
used by RBI

2. POLICY RATES
• Bank Rate : 6.0%
• Repo Rate : 6.75%
• Reverse Repo Rate : 5.75%
As on 2012 April 17
• Bank Rate : 9.00%
• Repo Rate : 8.00%
• Reverse Repo Rate : 7.00%

3. RESERVE RATIOS
• CRR : 6.0%
• SLR : 24.0%
• CRR : 4.75%
• SLR : 24.0%

4. EXCHANGE RATES
• INR / 1 USD : 44.3000
• INR / 1 Euro : 64.6900
• INR / 100 Jap. YEN : 54.0000
• INR / 1 Pound Sterling : 72.9244
• INR / 1 USD : 51.5035
• INR / 1 Euro : 67.5415
• INR / 100 Jap. YEN : 63.3100
• INR / 1 Pound Sterling : 81.9884

5. LENDING/DEPOSIT RATES
Base Rate : 7.60% - 8.50%
Savings Bank Rate : 3.5%
Deposit Rate : 7.00%-8.00%
• Base Rate : 10.00%-10.75%
• Savings Bank Rate : -
• Deposit Rate : 8.50%-9.25%

6. • Bank rate, also referred to as the discount
rate, is the rate of interest which a central
bank charges on the loans and advances that
it extends to commercial banks and other
financial intermediaries. Changes in the bank
rate are often used by central banks to control
the Money supply

7. • Repo rate: Whenever the banks have any
shortage of funds they can borrow it from the
central bank. Repo rate is the rate at which
our banks borrow currency from the central
bank. 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. In order to increase the
liquidity in the market, the central bank does
it.

8. • The Reverse repo rate is the rate at which the
banks 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 then,when there is surplus
liquidity in the market by the central bank.

9. • Difference between Bank Rate and Repo Rate
• While repo rate is an automatic tax, i.e.
applicable to short-term loans and used for
controlling the amount of money in the
market, bank rate is a long-term measure and
is governed by the long-term monetary
policies of the governing bank concerned.

10. • A bank rate is the interest rate that is charged
by a country’s central or federal bank on loans
and advances to control money supply in the
economy and the banking sector. This is
typically done on a quarterly basis to control
inflation and stabilize the country’s exchange
rates. A fluctuation in bank rates triggers a
ripple-effect as it impacts every sphere of a
country’s economy. For instance, the prices in
stock markets tend to react to interest rate
changes. A change in bank rates affects
customers as it influences prime interest rates
for personal loans

11. • What is Bank rate? Bank Rate is the rate at
which central bank of the country (in India it
is RBI) extends credit to commercial banks.
Bank Rate is a tool, which central bank uses
for short-term purposes. Any upward revision
in Bank Rate by central bank is an indication
that banks should also increase deposit rates
as well as Prime Lending Rates. This any
revision in the Bank rate indicates could mean
more or less interest on your deposits and
also an increase or decrease in your EMI.

12. • Repo (Repurchase) Rate
• 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.

13. • 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)
• Consequently, banks would have lesser funds to lend to their
customers. This helps stem the flow of excess money into the
economy

14. • Reverse repo rate signifies the rate
at which the central bank absorbs
liquidity from the banks, while repo
signifies the rate at which liquidity
is injected

15. • Bank Rate
• This is the rate at which RBI lends money to other
banks (or financial institutions ).
• The bank rate signals the central bank’s long-term
outlook on interest rates. If the bank rate moves
up, long-term interest rates also tend to move
up, and vice-versa.
• Banks make a profit by borrowing at a lower rate and
lending the same funds at a higher rate of interest. If
the RBI hikes the bank rate (this is currently 6 per
cent), the interest that a bank pays for borrowing
money (banks borrow money either from each other
or from the RBI) increases. It, in turn, hikes its own
lending rates to ensure it continues to make a profit.

16. • Call Rate
• Call rate is the interest rate paid by the banks
for lending and borrowing for daily fund
requirement. Si nce banks need funds on a
daily basis, they lend to and borrow from
other banks according to their daily or short-
term requirements on a regular basis.

17. • CRR
• Also called the cash reserve ratio, refers to a
portion of deposits (as cash) which banks have
to keep/maintain with the RBI. This serves two
purposes. It ensures that a portion of bank
deposits is totally risk-free and secondly it
enables that RBI control liquidity in the
system, and thereby, inflation by tying their
hands in lending money