Hi sir one basic question, if RBI can use crr for money supply, why it have or haven't changing the repo rate, what is difference in impacts of these different tools with respect to bank and economy?
@gowthamramesh9656 CRR is a more structural tool that influences how much money banks have available to lend by controlling reserves, thus impacting long-term liquidity. Repo Rate is a more flexible tool used to influence short-term borrowing costs and overall liquidity in the economy, which has immediate effects on interest rates and economic activity. The RBI adjusts these tools based on the macroeconomic situation, with the repo rate being more responsive to short-term economic conditions (like inflation and growth), while the CRR is used for longer-term adjustments to liquidity in the banking system.
If banks do as you said,it will lead on to not meet the target that no entity come to buy a loan,sequel of this,money supply is not improved.if rbi finds which banks do their disobeyed function,rbi imposed penalty highly and take into the bank as not creditworthy.furthermore rbi will be defunct deliberately as the situation of that banks' urgency rises.
Such a big session😅... Thank you sir✨
Awesome 🎉sir
Sir evlo seekrama mudika mudiyutho avlo seekrama total economicsum complete panna January la irunthu revise panna easy ya irukum sir
😅17:55
Hi sir one basic question, if RBI can use crr for money supply, why it have or haven't changing the repo rate, what is difference in impacts of these different tools with respect to bank and economy?
@gowthamramesh9656 CRR is a more structural tool that influences how much money banks have available to lend by controlling reserves, thus impacting long-term liquidity.
Repo Rate is a more flexible tool used to influence short-term borrowing costs and overall liquidity in the economy, which has immediate effects on interest rates and economic activity.
The RBI adjusts these tools based on the macroeconomic situation, with the repo rate being more responsive to short-term economic conditions (like inflation and growth), while the CRR is used for longer-term adjustments to liquidity in the banking system.
Nice class
@curiousadil what happen if RBI reduced its lending rate and bank does not reduce the lending rate
If banks do as you said,it will lead on to not meet the target that no entity come to buy a loan,sequel of this,money supply is not improved.if rbi finds which banks do their disobeyed function,rbi imposed penalty highly and take into the bank as not creditworthy.furthermore rbi will be defunct deliberately as the situation of that banks' urgency rises.
That's what happened in 2018-2020
In that time, RBI used other measures like Operation twist and Benchmarking to induce banks for a rate cut.
Sir ithu enna ncert please sollunga?
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sir MSB bonds long term ah ila short term ah.