Difference between bank rate and prime rate

Question

What is the difference between the bank rate and the prime rate? The prime rate is the rate at which banks lend each other money, but what is the bank rate?

score 5 · Accepted Answer · answered Jan 02 '14 at 22:37

5

The prime rate is actually the rate at which banks lend to consumers/businesses with the highest credit ratings. The bank rate (more commonly known as the overnight rate) is the interest rate at which banks can borrow funds from the Bank of Canada or from each other.

answered Jan 02 '14 at 22:37

NL - Apologize to Monica

32,709
19
85
144

Thanks. So bank rate is same as repo rate?http://economictimes.indiatimes.com/definition/repo-rate – Victor123 Jan 03 '14 at 16:49
1

@Kaushik, yes. I tried to use the terminology common to Canada because of the tag. – NL - Apologize to Monica Jan 03 '14 at 17:25

Difference between bank rate and prime rate

1 Answers1

Linked