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April 19, 2001
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RBI leaves Bank Rate, CRR unchanged

Click here for bigger picture: RBI Governor Bimal Jalan. Photo: Jewella MirandaThe Reserve Bank of India on Thursday said it had left the bank rate and cash reserve ratio unchanged.

The RBI, late in the last financial year, lowered its bank rate to 7.0 per cent from 8.0 per cent and the CRR to 8.0 per cent from 8.5 per cent.

The announcement was part of the RBI's monetary and credit policy for 2001-02 (April-March) prepared against the background of a scandal-hit banking sector and a slowing economy.

SLR = statutory liquidity ratio. Banks in India are required to maintain 25 per cent of their demand and time liabilities in government securities and certain approved securities. These are collectively known as SLR securities. The buying and selling of these securities was the seed of the 1992 scam.

CRR = cash reserve ratio, the fortnightly cash balances maintained by commercial banks with the central bank.

FCNR(B) deposits. (foreign currency non resident Indian - banking deposits.)

FCNR (foreign currency non resident Indian).

M1: A measure of money supply that includes all coins and notes in circulation, and personal current accounts. M3: A measure of money supply, including those covered by M2 -- a measure of money, supply, including M1, plus personal deposit accounts -- plus government deposits and deposits in currencies other than rupee.

Repo: repurchase agreements or ready forward deals, a secured short-term -- usually 15-day -- loan by one bank to another against government securities. Legally, the borrower sells the securities to the lending bank for cash, with the stipulation that at the end of the borrowing term it will buy back the securities at a slightly higher price, the difference in price representing the interest.

Monetary & Credit Policy 2001-2002 (First Half)

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