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Project Report

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Submitted By Srimukesh
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ASSIGNMENT OF
WORKING CAPITAL MANAGEMENT

SUBMITTED TO: | SUBMITTED BY: | Mr Deepak Batra | Mukesh Srivastava PGDM-12-29 (finance) |

BASE RATE | | Base Rate (BR): 10.25% w.e.f: 25 February 2013 | Notice to the Borrower: Base Rate linked pricing system of loans and advances has been started since 01.07.2010. Base Rate is the minimum rate below which Banks are not permitted to lend barring certain exceptions. In respect of existing loans, borrowers have an option to either continue with the existing system of BPLR till the maturity of their loans or switch over to the new system of Base Rate. No fee will be charged from the borrower for such switch over. Prescribed Option Letter for borrowers is available with all Branches. Borrowers desirous for change over to Base Rate may contact the branch requesting to issue the Option letter for change over to Base Rate at any time during the pendency of their BPLR linked loans. Base Rate will be reviewed and may be changed from time to time. |

DEFINITION OF 'REPO RATE'
INSHARE
Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

Definition: Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

Description: In the event of inflation, central banks increase repo rate as this acts as a disincentive for banks to borrow from the central bank. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.

The central bank takes the contrary position in the event of a fall in inflationary pressures. Repo and reverse repo rates form a part of the liquidity adjustment facility.

BANK RATE,
also

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