Presently banks are not paid any interest on behalf of the rbi for parking the required cash.
Floor rate and ceiling rate of crr.
An interest rate floor reduces the risk to the bank or other party receiving the interest.
For example an adjustable rate mortgage may have an interest rate floor stating that the rate will not go below 3 5 even if the formula used to calculate the interest rate would have it do so.
Good cake isn t cheap.
However the rbi amendment act 2006 provides for removal of the floor and ceiling with respect to setting the crr and authorizes the rbi to set the ratio in keeping with the broad objective of maintaining monetary stability in the economy.
Cheap cake isn t good.
Your floor rate is the minimum rate you must charge to justify your time spent working on the project.
Mumbai june 23 uni the reserve bank of india rbi can now prescribe cash reserve ratio crr to scheduled banks without any floor rate or ceiling rate as per the needs of securing monetary.
For those quoting a fixed price for client projects there are two important things to know when it comes to setting a fair price for the work.
An interest rate ceiling is the maximum interest rate permitted in a particular transaction.
Your floor and ceiling billing rates.