Distinguish between.
Bank Rate and Rate of Interest.
Bank Rate and Rate of Interest.
The difference between bank rate and rate of interest are as follow:
1. Bank
rate is the rate charged on the loans offered by the Central bank to the
commercial banks without any collateral whereas Rate of interest is the
rate charged on the loans offered by the commercial banks to the people with or
without any collateral.
2. Bank rate is determined and set by the Central bank which
remain fixed for every commercial bank whereas rate of interest in determined
and set by the respective commercial bank and varies bank to bank.
3. Bank rate is a quantitative tool of credit control in the
economy to control the situation of inflation and deflation whereas rate of
interest is not a tool of credit control as it is not determined by the central bank.
The difference between bank rate and rate of interest are as follow:
1. Bank rate is the rate charged on the loans offered by the Central bank to the commercial banks without any collateral whereas Rate of interest is the rate charged on the loans offered by the commercial banks to the people with or without any collateral.
2. Bank rate is determined and set by the Central bank which remain fixed for every commercial bank whereas rate of interest in determined and set by the respective commercial bank and varies bank to bank.
3. Bank rate is a quantitative tool of credit control in the economy to control the situation of inflation and deflation whereas rate of interest is not a tool of credit control as it is not determined by the central bank.
