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What is reverse repo rate?

Asked on 07-06-2018 by Anonymous -

Answered by NewsBytes

Reverse repo rate is the rate of interest at which banks deposit their surplus funds with the RBI for short periods of time. When banks have surplus funds but have no other lending or investment options, so they deposit their surplus funds with RBI. Banks earn interest on such funds from RBI.

What is SLR?

Asked on 07-06-2018 by Anonymous -

Answered by NewsBytes

SLR is Statutory Liquidity Ratio. It is that percentage of the bank deposits that they have to invest in specified financial securities like Central Government or State Government securities. This amount is predominantly invested in government-approved securities (bonds), Gold, etc.

What is inflation?

Asked on 07-06-2018 by Anonymous -

Answered by NewsBytes

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of the currency is falling. Central banks attempt to limit inflation and avoid deflation in order to keep the economy running smoothly.

What is CRR?

Asked on 07-06-2018 by Anonymous -

Answered by NewsBytes

CRR is called the cash reserve ratio. CRR is a percentage of total bank deposits that banks have to maintain with the Reserve Bank of India (RBI) at all times. Banks do not have access to such amount for any economic or commercial activity.

I want to take a home loan, will it be costly too?

Asked on 07-06-2018 by Anonymous -

Answered by NewsBytes

With an increase in the Repo Rate, the EMIs on your borrowings from banks, be it a personal loan, car loan or home loan will increase as the banks will pass on the burden of the increased interest rate to their customers.