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Prelims and Mains, All at one place

Bank Rate

< 1 min read

Definition: The rate at which the RBI re-discounts bills of exchange and extends long-term credit to banks.

Key Points for Prelims:

• Bank Rate is aligned with the MSF rate.

• It is a penal rate for shortfall in CRR/SLR.

• Changes in Bank Rate signal long-term policy stance.

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