CRR Rate :Cash reserve Ratio (CRR) is the amount of funds
that the banks have to keep with RBI. If RBI decides to increase the
percent of this, the available amount with the banks comes down. RBI is
using this method (increase of CRR rate), to drain out the excessive
money from the banks.
Reverse Repo rate
:Reverse Repo rate is the rate at which Reserve Bank of India (RBI)
borrows money from banks. Banks are always happy to lend money to RBI
since their money are in safe hands with a good interest. An increase in
Reverse repo rate can cause the banks to transfer more funds to RBI due
to this attractive interest rates. It can cause the money to be drawn
out of the banking system. Due to this fine tuning of RBI using its
tools of CRR, Bank Rate, Repo Rate and Reverse Repo rate our banks
adjust their lending or investment rates for common man.
Repo Rate
: Whenever the banks have any shortage of funds they can borrow it from
RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A
reduction in the repo rate will help banks to get money at a cheaper
rate. When the repo rate increases borrowing from RBI becomes more
expensive.
Statutory Liquidity Ratio :SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit.
Leverage Ratio
1. The most well known financial leverage ratio is the debt-to-equity ratio. For example, if a company has $10M in debt and $20M in equity, it has a debt-to-equity ratio of 0.5 ($10M/$20M).
2. Companies with high fixed costs, after reaching the breakeven point, see a greater increase in operating revenue when output is increased compared to companies with high variable costs. The reason for this is that the costs have already been incurred, so every sale after the breakeven transfers to the operating income. On the other hand, a high variable cost company sees little increase in operating income with additional output, because costs continue to be imputed into the outputs. The degree of operating leverage is the ratio used to calculate this mix and its effects on operating income
Statutory Liquidity Ratio :SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit.
Leverage Ratio
1. The most well known financial leverage ratio is the debt-to-equity ratio. For example, if a company has $10M in debt and $20M in equity, it has a debt-to-equity ratio of 0.5 ($10M/$20M).
2. Companies with high fixed costs, after reaching the breakeven point, see a greater increase in operating revenue when output is increased compared to companies with high variable costs. The reason for this is that the costs have already been incurred, so every sale after the breakeven transfers to the operating income. On the other hand, a high variable cost company sees little increase in operating income with additional output, because costs continue to be imputed into the outputs. The degree of operating leverage is the ratio used to calculate this mix and its effects on operating income
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