BANKING AFFAIRS

Detailed explanation-1: -In simpler words, the Bank rate is a rate at which the Reserve Bank of India (RBI) provides the loan to commercial banks without keeping any security There is no single agreement on repurchase that will be drawn up or agreed upon with no collateral as well.

Detailed explanation-2: -discount rate, also called rediscount rate, or bank rate, interest rate charged by a central bank for loans of reserve funds to commercial banks and other financial intermediaries.

Detailed explanation-3: -If the central bank raises the discount rate, then commercial banks will reduce their borrowing of reserves from the Fed, and instead borrow from the federal funds market, or for more serious needs, call in loans to replace those reserves.

Detailed explanation-4: -Bank rate, also known as discount rate in American English, is the rate of interest which a central bank charges on its loans and advances to a commercial bank.