Introduction to RBI's key Policy Rates

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RBI KEY POLICY RATES

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Introduction
Reserve Bank of India (RBI) plays an important role in managing Money Supply & Inflation in
the country. This task of managing money supply & Inflation in the economy is performed by
maintaining key policy rates.
The Key policy rates are as follows:
Repo Rate
Reverse Repo Rate
Bank Rate
Marginal Standing Facility (MSF)
Cash Reserve Ratio (CRR)
Statutory Liquidity Ratio (SLR)

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Current Facts - SMEs & MSMEs
Repo rate is the rate at which the RBI lends money to commercial banks in the event of any
shortfall of funds.
Reverse repo rate is the rate at which the RBI borrows money from commercial banks
within the country
CRR - is a specified minimum Percentage of the total deposits of customers to be hold as
reserves either in cash or as deposits with the central bank.
SLR - Stipulated proportion of their net demand and time liabilities in the form of liquid
assets like cash, gold and unencumbered securities.
Bank rate, also referred to as the discount rate, is the rate of interest which RBI charges on
the loans and advances to a commercial bank.
Marginal standing facility is a window for banks to borrow from the RBI in an emergency
situation when inter-bank liquidity dries up completely.

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CRR 4.00 % SLR 20.75 %

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