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CCP604 (B)
CCP604 (B)
Andhra Pradesh
Name Staff Member : P. BADARINARAYANA
Designation : Sr. Lecturer
Branch : DCCP
Institute : Govt. Polytechnic, NELLORE
Year/Semester : VI Semester
Subject : Banking-II
Sub. Code : CCP-604(B)
Topic : functions of RBI
Duration : 50 Mts.
Sub Topic : Bank Rate Policy
Teaching Aids : Animations
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Objective
On completion of this period we would be able
to
comprehend the Bank Rate Policy of the
RBI.
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Recap
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Credit Control
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Credit Control
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Bank Rate
The Bank Rate is the rate of interest, which is
charged by the RBI on its advances to
commercial banks.
When the RBI desires to restrict expansion of
credit, it RAISES the bank rate thereby making
the credit costlier to commercial banks, who
resort to borrowings from it for their lending
operations.
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Bank Rate…
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Bank Rate…
Similarly, in times of depression when the problem
is to encourage the banking system to create more
credit, the RBI REDUCES THE Bank Rate,
Thereby accommodating the commercial banks in
the country on liberal scale.
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Bank Rate…
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Bank Rate…
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Summary
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Quiz
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Quiz
2. To facilitate more loans to banks, the RBI
a) Raises the bank rate
b) Reduces the bank rate
c) No change in the bank rate
d) changes the directors
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Frequently Asked Questions
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