POLICY RATES OF RBI

1) Repo Rate:
Repo rate is the rate of interest which is levied on Short Term loans taken by commercial banks from RbI. Whenever banks have any shortage of fund they can borrow it from RBI.


2) Reverse Repo Rate:
This is exact opposite of Repo Rate. Reverse Repo Rate is the rate at which commercial banks charge on their surplus funds with RBI. RBI uses this tool when it feels there is too much money floating in the banking system.

3) Cash Reserve Ratio (CRR):
CRR is the amount of Cash funds that the banks have to maintain with RBI in cash as reserves.

4) Statutory Liquidity Ratio (SLR):
SLR is the amount a commercial bank needs to maintain in the form of Cash,  or Gold or Government Approved Securities before providing credit to its customers.

5) Bank Rate:
Bank Rate is the rate of interest which is levied on Long Term loans and Advances taken by Commercial Banks from RBI.

6) Marginal Standing Facility Rate (MSF Rate):
MSF is the rate at which banks can borrow overnight from RBI.
This was introduced in the monetory policy of RBI for the year 2011-12.
Banks can borrow funds through MSF when there is a considerable shortfall of liquidity.