Different Transactions between Central Bank and Commercial Bank

Transcript

Loan Transaction between Central Bank and Commercial Banks Central Bank Gives loans to Commercial Banks Commercial Bank use this amount for lending to Public Example Suppose RBI provides Loan to SBI @ 6% SBI provides loan to public @ 11%RBI (Central Bank) It is called Bank Rate SBI (Commercial Bank) It is called Lending Rate Public It is called Lending Rate Is Loan given by Central Bank Asset or Liability? For Central Bank Loan given It is an Assets For Commercial banks it is Loan taken Liability Deposit Transaction between Central Bank and Commercial Banks Public deposit their money in Savings Account and FD of Banks Similarly commercial banks deposit their surplus money with Central Bank Public Commercial Banks Central Bank Are Deposits of Commercial Bank with Central Bank Assets or Liability ? For Commercial banks It is Deposits Made (Assets) For Central Bank (RBI) It is Deposits Received (Liability)