Santa: I have heard recently that Mr. Rajan has reduced Repo Rate by 50 basis points and everyone is saying that this is good for the market. Loan EMI may also come down. What is this rate cut means actually? I want to understand this.
Banta: To understand this you first need to know, how does a bank function.
Santa: Why?
Banta: Because all these are inter-related. Tell me – what does a bank do?
Santa: Bank takes money from depositors and gives loan to earn interest. That way they keep everyone happy and make a profit also.
Banta: Correct, but there are more to it. Let me explain this in a very simplistic way. Bank needs money. Bank can get money from depositors like you and me and also from RBI. But bank also needs to pay certain interest to us and also to RBI.
Santa: Ok.
Banta: Let us try to understand first – what happens when we deposit, say, Rs. 100 with a bank.
Santa: I know that. Bank gives that Rs. 100 to someone who needs a loan.
Banta: No, it is not that simple. Remember, though bank can earn interest by giving away loans, but it is also very risky. There are many cases of loan defaults. This way banks can put all our money into high risk areas. It has to be protected.
Santa: How?
Banta: Ok, RBI has made it mandatory that upon receiving, say, Rs. 100 – banks first have to deposit Rs. 4 with RBI. RBI keeps this Rs. 4 in its current a/c and hence banks do not receive any interest on this money. This is known as Cash Reserve Ratio or CRR, which is currently at 4%.
Santa: Hmmm, then?
Banta: RBI has also made it mandatory that upon receiving, say, Rs. 100 – banks need to compulsorily buy central and state govt. securities of Rs. 21.50. Of course banks will earn some interest income here. This is known as Statutory Liquidity Ratio (SLR), which is currently at 21.50%.
Santa: Ok, so you mean to say that upon receiving Rs. 100, banks can spend only Rs. 74.50 at its own will.
Banta: Correct. 100 – (4 + 21.50) = 100 – 25.50 = 74.50
Santa: But you were saying that banks can also borrow from RBI. What interest banks pay to RBI?
Banta: Before 30th September, banks were paying 8.25% interest to RBI when it borrows money from RBI. Now this rate has been reduced by 50 basis points. So banks now need to pay interest to RBI, if it borrows from RBI, at the rate of 7.75%. This is known as Repo Rate.
Santa: Can fixed deposit rate be affected by reduction of Repo Rate?
Banta: Of course. If banks get money from RBI @7.75%, why will banks pay higher interest to you and me? One year FD rate is already revised by many banks and it is equal to or very close to 7.75%.
Santa: But as now banks are getting money at a cheaper rate, then they should reduce the loan interest rate i.e. passing on the benefits it receives.
Banta: Correct. They should. And on that hope market is cheering. If companies get loan at a cheaper rate, they will likely to expand their businesses. That will create more jobs, more income and boost the economy.
Santa: How is inflation linked to this?
Banta: See, when loan becomes cheaper, people tends to borrow more. That means people will have more money to spend. This will increase the demand for goods, and if supply does not increase to match this demand, then prices will increase.
Santa: So there is a chance, that inflation may rise also?
Banta: Well, yes. But inflation depends on many other factors as well, like production (industrial and agricultural), manufacturing, export – import, foreign currency movement etc. So inflation may increase or may not.
Santa: One last question. Like we deposit our money with banks, can banks also deposit their money with someone?
Banta: Yes, they can deposit with RBI and earn interest too. This interest is typically 1% less than the repo rate. This rate is known as Reverse Repo Rate.
Santa: Great! So now I understand CRR, SLR, Repo Rate, Reverse Repo Rate and their impact on deposit rate, loan interest rate and on inflation. Thanks.
Banta: Welcome!
Wednesday, 7 October 2015
Thursday, 1 October 2015
Laloo English Joke Meme
Joke of the year 2015 - Laloo teaching his children spelling of assassination. One ass behind another ass, behind that I, and behind me the whole nation.. 😂😂😂
Tuesday, 25 August 2015
Top 10 school teacher dialogues
Only for those who enjoyed their school life😂😂😂
Top 10 Dialogs of teachers 🙏🙏
👉 If you are not interested then you may leave the class.
👉 This class is worse than a fish market.
👉 Are you here to waste your parents money?
👉 Tell me when you all have finished talking.
👉 Why are u laughing? Come here n tell us we'll also laugh.
👉 Do you think teachers are fools to teach you?
👉 Don't try to act oversmart with me.
👉 Why do u come to school when you don't want to study.
👉 The previous batch was 100 times better than yours.
👉 If you want to talk then u may get out from the class.
And the best one
👉 You yes you... I am talking to you only, don't look back.. 😄😄
.
.
.
.muje pata h last line padh k tum log k mu pe smile jarur ayi hogi
Ye hum sab ka Bachpan tha 😝😆
Aur yeh last wali line pe jo hota tha na, uski shakal duniya ki sabse bholi shakal ho jaati thi....
Top 10 Dialogs of teachers 🙏🙏
👉 If you are not interested then you may leave the class.
👉 This class is worse than a fish market.
👉 Are you here to waste your parents money?
👉 Tell me when you all have finished talking.
👉 Why are u laughing? Come here n tell us we'll also laugh.
👉 Do you think teachers are fools to teach you?
👉 Don't try to act oversmart with me.
👉 Why do u come to school when you don't want to study.
👉 The previous batch was 100 times better than yours.
👉 If you want to talk then u may get out from the class.
And the best one
👉 You yes you... I am talking to you only, don't look back.. 😄😄
.
.
.
.muje pata h last line padh k tum log k mu pe smile jarur ayi hogi
Ye hum sab ka Bachpan tha 😝😆
Aur yeh last wali line pe jo hota tha na, uski shakal duniya ki sabse bholi shakal ho jaati thi....
Himalayan Golden Peaks
Monday, 24 August 2015
Joke about sensex falling 1625 points
Nifty Fut low today 7771... three 7s in it too (shemitah 7*7 effect)
--------------------
Jallianwala bagh massacre suna tha... Aaj dekh liya
--------------------
If you get call from any unknown number than don't pick up. It might be your broker.
--------------------
Buy liquor stock.... Today all bars will be full😄
--------------------
The biggest sale of Rakshabandhan on BSE NSE
Better deals than amazon, snapdeal and flipkart....
--------------------
High alert on all Indian internatinal airports...
koi bhi FII bhag ne na Paaye......
😃😜😄
#Sensexdrops -1625pts (-6%)
--------------------
Jallianwala bagh massacre suna tha... Aaj dekh liya
--------------------
If you get call from any unknown number than don't pick up. It might be your broker.
--------------------
Buy liquor stock.... Today all bars will be full😄
--------------------
The biggest sale of Rakshabandhan on BSE NSE
Better deals than amazon, snapdeal and flipkart....
--------------------
High alert on all Indian internatinal airports...
koi bhi FII bhag ne na Paaye......
😃😜😄
#Sensexdrops -1625pts (-6%)
Friday, 24 July 2015
Message to Indian Prime Minister on gas subsidy
Why, I will not waive my gas subsidy
Mangalore Today News Network
An Open Letter to the Prime Minister
By SUMITH S. RAO
Respected Sir:
You have asked the rich and affluent people of India to waive off their share of subsidy on gas cylinders used by them in their homes and help in nation building.
I, for one would definitely prescribe to your view and gladly do so. In return, I would like all of you esteemed gentlemen and ladies who run our great country to also reciprocate our generous offer.
If only, every corporator, MLA, MP, and Minister could also waive off his gas subsidy, we the people of India would be very proud of you and salute you.
You would be setting an example to the citizens of India. Most of you have declared incomes running into a few crores while contesting the elections.
When will the day come when you will think of our poor brethren and waive off all the perks that you enjoy because of your position.
When will you stop voting unanimously for a pay hike for yourselves, while bitterly fighting against all other issues in Parliament?
When will we see you act as responsible citizens and fight over issues rather than take party based decisions?
Let me tell you, dear Sir, the Chancellor of a super power like Germany Ms. Angela Merkel rides on a public train to work, whereas in our country everyone from the Prime Minister, to the Members of Parliament, even down to the Zilla Panchayat President is allocated a car which is paid for from the coffers of our country which is filled generously by the tax payers money.
You incur thousands of rupees worth of telephone bills, electricity bills, free accommodation in luxury bungalows, avail free travel on public transportation, go on foreign jaunts on flimsy excuses and we the people of India pay for it.
When will you be a proud Indian and pay for all these facilities availed by you?
You get admitted to luxury hospitals for even a headache and especially when a probe is launched against you for any misdemeanor. Even there, you get the best beds and facilities free of charge.
Pray, tell me, Sir "When will you pay for these privileges?"
You travel in air conditioned railway coaches and fly first class in planes even when you are not on official duty. It is us, the citizens of India who pay the fare for you.
Everyone, who is anybody, stakes his claim to fame by clamouring for "Z Class" security when the actual risk assessment for that person is zero. We, the people of India pay a fortune for your security.
Alas, what a travesty of our times. That you who should be protecting the nation are being protected by the common man at his cost.
There are people in India who cannot even afford one meal a day and do not even have the strength to complain about it. Sadly, while you enjoy a cup of coffee bought at a princely sum of Rupees One or a full meal at Rupees Twelve at the Parliament canteen in air conditioned comfort and cannot be bothered about these trivial issues.
When shall you pay the full cost of a meal without passing on the bill to your countrymen?
Sir, I am just an ordinary citizen of India who dutifully pays his Income tax, Service Tax, Value Added Tax, Wealth Tax, Corporation Tax, Automobile Registration Tax and Property Tax which goes up to nearly 50 percent of our hard earned money while you enjoy the benefits of these taxes and live a privileged life because every citizen of India pays for your privileges.
The day all of you forego and waive all the unnecessary perquisites bestowed upon you by laws enacted by you would be a proud one in our nation's history.
The day, you gentlemen who have been elected to power by the people to govern our nation become responsible citizens of INDIA will be a milestone in our history. That day, all of us will definitely waive off our gas subsidy.
Yours sincerely,
An honest and dutiful citizen.
Sumith S. Rao is a well known city based businessman and a former President of the District Small Scale Industries Association.
Note:- Please circulate, so it reaches the PM.
Dear Citizens
Forward this msg to a minimum of twenty people on your contact list; and in turn ask each of them to do likewise.
In three days, most people in India will have this message.
This is one idea that really should be passed around.
*Reform Act of 2014*
1. No Tenure / No Pension: Parliamentarians collect a salary while in office but should not receive any pay when they're out of office.
2. Parliamentarians should purchase their own retirement plans, just as all Indians do.
3. Parliamentarians should no longer vote themselves a pay raise. Their pay should be linked to the CPI or 3%, whichever is lower.
4. Parliamentarians should lose their current health care system and participate in the same health care system as the Indian people.
5. Parliamentarians with tainted records, criminal charges & convictions, past or present should be summarily banned from the parliament and fighting election on any pretext or the other.
6. Parliamentarians should equally abide by all laws they impose on the Indian people.
7. All contracts with past and present Parliamentarians should be void effective 1/1/15
The Indian people did not make this contract with them. Parliamentarians made all these contracts for themselves.
Serving in Parliament is an honor, not a lucrative career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.
No surrender of subsidies like LPG by citizens unless all subsidies available to MPs and MLAs withdrawn including subsidised food in Parliament canteen
If each person contacts a minimum of twenty people then it will only take three days for most people in India to receive the message. Don't you think it's time?
If you agree with the above, pass it on. If not, just delete.
You are one of my 20+ - Please keep it going, and thanks.
😡😡😡🇮🇳🇮🇳🇮🇳😡😡😡
Mangalore Today News Network
An Open Letter to the Prime Minister
By SUMITH S. RAO
Respected Sir:
You have asked the rich and affluent people of India to waive off their share of subsidy on gas cylinders used by them in their homes and help in nation building.
I, for one would definitely prescribe to your view and gladly do so. In return, I would like all of you esteemed gentlemen and ladies who run our great country to also reciprocate our generous offer.
If only, every corporator, MLA, MP, and Minister could also waive off his gas subsidy, we the people of India would be very proud of you and salute you.
You would be setting an example to the citizens of India. Most of you have declared incomes running into a few crores while contesting the elections.
When will the day come when you will think of our poor brethren and waive off all the perks that you enjoy because of your position.
When will you stop voting unanimously for a pay hike for yourselves, while bitterly fighting against all other issues in Parliament?
When will we see you act as responsible citizens and fight over issues rather than take party based decisions?
Let me tell you, dear Sir, the Chancellor of a super power like Germany Ms. Angela Merkel rides on a public train to work, whereas in our country everyone from the Prime Minister, to the Members of Parliament, even down to the Zilla Panchayat President is allocated a car which is paid for from the coffers of our country which is filled generously by the tax payers money.
You incur thousands of rupees worth of telephone bills, electricity bills, free accommodation in luxury bungalows, avail free travel on public transportation, go on foreign jaunts on flimsy excuses and we the people of India pay for it.
When will you be a proud Indian and pay for all these facilities availed by you?
You get admitted to luxury hospitals for even a headache and especially when a probe is launched against you for any misdemeanor. Even there, you get the best beds and facilities free of charge.
Pray, tell me, Sir "When will you pay for these privileges?"
You travel in air conditioned railway coaches and fly first class in planes even when you are not on official duty. It is us, the citizens of India who pay the fare for you.
Everyone, who is anybody, stakes his claim to fame by clamouring for "Z Class" security when the actual risk assessment for that person is zero. We, the people of India pay a fortune for your security.
Alas, what a travesty of our times. That you who should be protecting the nation are being protected by the common man at his cost.
There are people in India who cannot even afford one meal a day and do not even have the strength to complain about it. Sadly, while you enjoy a cup of coffee bought at a princely sum of Rupees One or a full meal at Rupees Twelve at the Parliament canteen in air conditioned comfort and cannot be bothered about these trivial issues.
When shall you pay the full cost of a meal without passing on the bill to your countrymen?
Sir, I am just an ordinary citizen of India who dutifully pays his Income tax, Service Tax, Value Added Tax, Wealth Tax, Corporation Tax, Automobile Registration Tax and Property Tax which goes up to nearly 50 percent of our hard earned money while you enjoy the benefits of these taxes and live a privileged life because every citizen of India pays for your privileges.
The day all of you forego and waive all the unnecessary perquisites bestowed upon you by laws enacted by you would be a proud one in our nation's history.
The day, you gentlemen who have been elected to power by the people to govern our nation become responsible citizens of INDIA will be a milestone in our history. That day, all of us will definitely waive off our gas subsidy.
Yours sincerely,
An honest and dutiful citizen.
Sumith S. Rao is a well known city based businessman and a former President of the District Small Scale Industries Association.
Note:- Please circulate, so it reaches the PM.
Dear Citizens
Forward this msg to a minimum of twenty people on your contact list; and in turn ask each of them to do likewise.
In three days, most people in India will have this message.
This is one idea that really should be passed around.
*Reform Act of 2014*
1. No Tenure / No Pension: Parliamentarians collect a salary while in office but should not receive any pay when they're out of office.
2. Parliamentarians should purchase their own retirement plans, just as all Indians do.
3. Parliamentarians should no longer vote themselves a pay raise. Their pay should be linked to the CPI or 3%, whichever is lower.
4. Parliamentarians should lose their current health care system and participate in the same health care system as the Indian people.
5. Parliamentarians with tainted records, criminal charges & convictions, past or present should be summarily banned from the parliament and fighting election on any pretext or the other.
6. Parliamentarians should equally abide by all laws they impose on the Indian people.
7. All contracts with past and present Parliamentarians should be void effective 1/1/15
The Indian people did not make this contract with them. Parliamentarians made all these contracts for themselves.
Serving in Parliament is an honor, not a lucrative career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.
No surrender of subsidies like LPG by citizens unless all subsidies available to MPs and MLAs withdrawn including subsidised food in Parliament canteen
If each person contacts a minimum of twenty people then it will only take three days for most people in India to receive the message. Don't you think it's time?
If you agree with the above, pass it on. If not, just delete.
You are one of my 20+ - Please keep it going, and thanks.
😡😡😡🇮🇳🇮🇳🇮🇳😡😡😡
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