Page-3 of GKToday Archives: April, 2011

Discount Factor

In the compound interest rate, the future value is calculated with the following formula. Future Value = Present Value x (1 + R) n Where R is the Rate of Interest Rate (Yearly) N is the number of Years For ..

Base Rate System

Base Rate is the minimum lending rate that banks can charge their customers from July 1, 2010. Prior to this all lending rates were pegged to a Bank’s Prime Lending Rate or PLR. The banks were charging the customers an ..

Interest Rates

When a person borrows some money from another person, this money comes at an interest which can also be called the “Opportunity Cost” of the money. The amount lent is called the “Principal” and the interest on the “Principal” is ..

Credit Control: Quantitative Measures v/s Qualitative Measures RBI

Credit control is most important function of Reserve Bank of India. Credit control in the economy is required for the smooth functioning of the economy. By using credit control methods RBI tries to maintain monetary stability. There are two types ..

Open Market Operations

Open Market Operations refer to the purchase and sale of the Government securities (G-Secs) by RBI from / to market. The objective of Open Market Operations is to adjust the rupee liquidity conditions in the economy on a durable basis. ..

Credit creation

The question arises is that what is the difference between Narrow Money (M1), Broad Money (M3) and Reserve Money? This is very important question. When we say that Reserve Money is the Real Cash Money held with both the Public ..