What is a Contractionary Policy?

January 8, 2018

Contractionary Policy refers to the monetary policy which aims to slow down the economy by introducing a reduction in money supply for lesser money and investment. There are many economic tools used by the Central Bank of every nation like CRR, SLR, Repo, Reverse Repo, Interest Rate etc. to...

What is the meaning of Cash Reserve Ratio?

December 21, 2017

Cash Reserve Ratio is a specific amount of funds which the commercial banks have to keep with the Reserve Bank of India to ensure liquidity in the system. The funds are a part of the Net Demand and Time Liabilities (NDTL). A reduction in CRR leads to more liquidity...

What is the meaning of Call Money Rate?

December 18, 2017

Call Money Rate stands for the interest rate on short-term loans which are given by banks to brokers for funding of margin accounts. These do not have any repayment schedule and has to be repaid on demand. Although trading on margins is risky as it is done with borrowed...

RBI revises Market Stabilisation Scheme (MSS), raises ceiling to Rs. 6L crore

December 3, 2016

In a major move to deal with extra liquidity created in the system due to the demonetisation drive, the Central government as per the directions of the Reserve Bank of India raised the ceiling on Market Stabilization Scheme from Rs. 30,000 Crores to Rs. 6 Lakh Crores. The Banks...