What is SLR Rate ?

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.

How is SLR determined?

SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. .

What is the Need of SLR?

With the SLR (Statutory Liquidity Ratio), the RBI can ensure the solvency a commercial bank. It is also helpful to control the expansion of Bank Credits. By changing the SLR rates, RBI can increase or decrease bank credit expansion. Also through SLR, RBI compels the commercial banks to invest in government securities like government bonds..

SLR to Control Inflation and propel growth

SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently.

What is a Personal Loan & How to Apply for it ?

Get Loan without security

You do not have to provide any security. It is purely a unsecured loan given to you only on the basis of your financials.

Faster Loan approval

Banking system in India has improved a lot and the money in need can be availed within few days. Now a days banks are providing attractive personal loans.

Loans upto 20 lakhs

Generally personal loans are available from 50,000 to 20 lakhs. The amount eligible is based on your actual financials and profile. Some banks even offer more. Any Salaried or Self employed individual are eligible for personal loan. The repayment can be chosen from 12 to 60 months tenure. Repayments are done via EMI (equated monthly installments) Resonable interest rates are one of the attraction.

How do I know that I am Eligible for Personal loan?

Eligibility is measured based on your income, which is valuated with ITR(incom taxreturns) , salary or form 16. You can expect a personal loan equivalent to EMI one half of monthly income.

How is my monthly income of self employed calculated?

Monthly income for self employed or business man is calculated as follows :
1/12th x (Net Profit + Interest to Partners + Interest to unsecured loans + Depreciation)

How can I payback my loan? You can pay back the loan in EMI’s (equated monthly installments) using post dated cheques favouring the Bank. Is there any Age limit for applying for a personal loan? Minimum age is 21 years. Maximum age is of an applicant at the time of loan maturity should be 60 years (salaried) and 65 years (self employed). Is there any additional charges for the loan? Usually there will be a processing fee of 2% of the loan amount, which is payable upfront. This fees will be already deducted from the loan amount approved to you. Some banks even waive of the processing fee to attract more customers. I want to prepay my loan, is it possible? Partial prepayments are not allowed. You have to prepay the entire outstanding loan amount. It can be done any time. There are some charges for prepayment. Any minimum income required to apply for a loan? It varies on each bank’s policies. But in general the minimum annual income should be Rs. 1 lakh. Do I have to open an account with the bank issuing loan? It is not necessary to open an account with the bank issuing loan. But most of the banks will encourage you to open an account to start a banking relationship with you. How do I apply for a Loan? Most of the banks have online application, which can be done thru internet itself. Even some banks provide with SMS facility, after which a representative will fix an appointment with you to proceed further. How many days does it take to get the loan approved? It takes around 4~7 working days.

What is a 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.

What is 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.

What is Bank Rate ?

Bank rate is the rate at which RBI gives to the commercial banks. Whenever RBI increases its rates, the effect will be shown on the commercial banks. In this case, the commercial banks have to increase the interest rates for their profits.

Relation between Inflation and Bank interest Rates

Now a days, you might have heard lot of these terms and usage on inflation and the bank interest rates. We are trying to make it simple for you to understand the relation between inflation and bank interest rates in India.
Bank interest rate depends on many other factors, out of that the major one is inflation. Whenever you see an increase on inflation, there will be an increase of interest rate also.

What is Inflation ?

Inflation is defined as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are less Goods and more buyers, this will result in increase in the price of Goods, since there is more demand and less supply of the goods