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Reverse Repo Rate is one of the many tools at the disposal of the Reserve Bank of India. Reverse Repo Rate is basically a tool of Monetary Policy that the RBI uses to control liquidity and inflation. RBI borrows money for short term from banks, and Reverse Repo Rate is the interest rate paid on that. Reverse Repo Rate is the “reverse” or opposite of Repo Rate, the latter being the interest at which banks borrow money for short term from the RBI. As compared to the Reverse Repo Rate, Repo Rate is higher. Thus RBI gets money in times of distress, and the banks enjoy the benefits of good returns, everybody wins. Reverse Repo Rate finds numerous applications. An attractive Reverse Repo Rate invites banks to deposit money to the RBI to enjoy special gains. This causes a limit to the money supply in the market, resulting in the strengthening of the Rupee and gaining control over inflation. This also checks the liquidity in the banking system. Moreover, since Reverse Repo Rate appea...

If someone is an NRI and needs to take a home loan in India, he can approach the leading banks or NBFCs of the country. The Indian Constitution allows an NRI to own a residential or commercial property in the country with needed NRI home Loan documents . There are a lot of documents that the lender organization can ask for while granting the home loan to an NRI. They include: Detailed bank statement: The detailed bank statement is thoroughly checked by the lender initially because it is vital to understand the worthiness of an NRI borrower. The bank checks the credit score too. Passport: The passport of the borrower is thoroughly checked as it contains all the vital information. The lender bank crosschecks it with the data present in other ID cards provided by the borrower. Furthermore, an active passport actually denotes the transparency of the passport holder. Property-related papers: The banks always consider checking the property-related papers of the pre-existing properties. ...

The RBI looks after the monetary policy in India. To do that, RBI uses several financial tools like repo rate, bank rate, etc. Both MCLR and repo rates play a vital role in maintaining a smooth flow of fiscal policies in India. When the commercial banks borrow loans from the RBI, the interest rate that is imposed on the banks by RBI is called the repo rate. On the other hand, a bank can not lend money below the MCLR rate. Although, both MCLR and repo rate work with the same objective, still there are some major differences. Generally, the repo rate is regulated by RBI to increase or decrease the cash flow in the monetary system. However, MCLR is increased by the bank if the repo rate is increased. Changes in repo rate affect the area of the economy, but a change in MCLR only affects the people who want to take a loan. An increase of the Repo rate depends on the cashflow of the whole system while MCLR is increased by the bank depending on factors like operation funds, repayment tenur...

Getting a land purchasing loan can be a bit difficult as there is no collateral involved, but it is not impossible. But there are few things that you need to take care of for a land loan. These are important because it makes your work easier and does not pose difficulties after you get the approval of the loan. Also, getting more knowledge about anything can never be harmful. You first need to go for a location which is suitable for you. Like it should have basic utility facilities, useable public access, and future development plans, etc. It saves your time and money on later expenses. The next would be to have a definite plan of what are you buying the land for. The building which requires only some improvements, getting a loan for them is less tricky. Down payments for them are also not very high in comparison to other types of land loans. Land purchasing loans for the speculative purpose may gain you profit soon, but at present, availing them can be a huge cost incurring. The next...

RBI has recently reduced the repo rate to 5.15%. This reduction has shifted the RBI’s stance from calibrated tightening to neutral. Determination of Repo Rate RBI makes its monetary policies based on the Consumer Price Index and inflation. Repo rate is the rate at which banks borrow money from RBI against government securities. An increase in repo rate discourages banks from availing the loan, while decreases in repo rate encourage them to avail loan from RBI. Controlling inflation is the central aspect behind making any changes in the repo rate . The effect of repo rate cut falls on all entities, be it companies, individuals, or firms. Effect on Companies Lower repo rate means lower borrowing rates. This makes it cheaper for companies to avail loan from banks and expand their business. Effect on Individuals Individuals usually celebrate the reduction of repo rate, as the general thought process is, lower the repo rate lower will be the interest rate on loan. However, it is...

Land loan is a good choice to finance your land purchase. However, the amount of loan will be decided by the bank before sanctioning the amount. The maximum loan-to-value ratio in the case of land loan is around 70%. Banks approve the land loan only after proper verification and scrutiny of all documents and the land you want to purchase.  Here is the list of documents required: 1. Original land ownership documents 2. Detailed sketch of plot location approved by the municipality. 3. Revenue receipts and land records, which has been paid by the previous owner. 4. Tax receipts 5. Original sale deed with index II. 6. Copy of property’s registration card on the name of the borrower 7. Search and Title reports of the land in detail in the last 30 days. ‘ 8. Order certificate’s copy, which is issued by the Urban Land Ceiling Act. 9. Building Permission copy issued by the Local Corporation 10. Cost of construction which is estimated by the certified architect. Other documen...

With the banking system getting digitalized, the popularity of home loan has increased. Along with buying a new house, it also helps in the renovation and extension of a portion of the house. While availing the home loan, you have the option to chose from two home loan interest rate :  1. Under the fixed home loan, the rate of interest does not change irrespective of market changes. 2. Under the floating home loan, the rate of interest fluctuates from time to time.  Both interest rate types are different in their form and nature. Following are the advantages of fixed home loan interest and floating home loan interest: a) under a fixed home loan rate, there is no fluctuations in the rate of interest along with immunity from the changes in the external market. It makes budgeting for the dues easier. b) the floating home loan rate is comparatively lower than fixed rates, so a rise in rate to a certain extent will not have any effect. Disadvantages of fixed and ...