➡ Full form of RBI Policy Rates.
✔️ Policy Rates
▪️ Repo rate: It is rate at which RBI lends to its clients generally against government securities.
▪️ Reverse Repo Rate: It is rate at which banks lend funds to RBI.
▪️ Marginal Standing Facility (MSF) Rate: It is rate at which scheduled banks can borrow funds overnight from RBI against government securities. It is very short term borrowing scheme for scheduled banks.
▪️ Bank Rate: It is rate charged by central bank for lending funds to commercial banks. It influences lending rates of commercial banks. Higher bank rate will translate to higher lending rates by banks.
▪️ Cash Reserve Ratio (CRR): It is amount of funds that banks have to keep with RBI. The RBI uses CRR to drain out excessive money from system.
▪️Statutory Liquidity Ratio (SLR) : It is amount that banks have to maintain a stipulated proportion of their net demand and time liabilities (NDTL) in form of liquid assets like cash, gold and unencumbered securities, treasury bills, dated securities etc.