What is bank rate

Dear student. 
Bank rate refers to the rate at which the Central Bank lends to the commercial banks. Bank rate is one of the important instruments of controlling credit and money supply in the economy. 

An increase in the bank rate implies that loans for commercial banks from the Central Bank become expensive. The commercial banks in turn increase the rate of interest charged by them on the the loans they provide. This discourages the credit and loan in the economy. 
 

  • 0
bank rate is a rate which is given in terms cheque into the bank
  • 0
Bank rate is also reffered to as discount rate in amarican english
  • 1
What are you looking for?