RBI Monitory Policies

1) Bank Rate : 

Rate of rediscount at which the RBI discounts the first class bills of exchange brought by the banks.

2) Repo Rate : 

Injection of liquidity by the RBI is termed as " Repo Rate" . This was introduced in Dec. 1992 and Reverse Repo Rate in Nov. 1996. RBI buys Govt. Securities for a short period usually a fortnight, with an agreement to sell it later. Thus repo rate is a short-term money market instrument to stabilize short term liquidity in the economy.

3) Reverse Repo Rate :

Repo Rate is the rate at which the RBI lends to commercial banks where as the Reverse Repo Rate is the rate at which the RBI borrows from the commercial banks against securities for a very short period.

Repo and Reverse Repo rates are used as policy instruments for day-to-day liquidity management under the liquidity adjustment facility.

4) Cash Reserve Ratio (CRR) : 

It refers to the percentage of net demand and time deposits which the scheduled commercial banks have to keep with RBI at zero interest Rate as per RBI act 1934.

5) Statutory Liquidity Ratio (SLR) : 

It refers to the percentage of net demand and time deposits which the scheduled commercial banks have to keep with themselves. i.e. by purchasing Govt. Securities or in the form of cash or gold as per Banking Regulation Act 1949, Sec 24. SLR is a mechanism used by Commercial Banks for providing credit to the Govt.