Skip to main content Accessibility help
×
Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-11-24T23:40:38.108Z Has data issue: false hasContentIssue false

8 - THE INDIAN RATE OF DISCOUNT

Published online by Cambridge University Press:  05 November 2012

Get access

Summary

The presidency banks publish an official minimum rate of discount, in the same manner as the Bank of England. As an effective influence on the money market the presidency bank rates do not stand, and do not pretend to stand, in a situation comparable in any respect with the Bank of England's. They do not attempt to control the market and to dictate what the rate ought to be. They, rather, follow the market and supply an index of the general position.

It is, therefore, as the best available index to variations in the value of money in India that the presidency bank rates are chiefly interesting; and it is in this capacity that I shall make use of them in this chapter.

If we are to use these rates, however, as an index, a few warnings are first necessary. There is, of course, in India, just as there is in England, not one single rate for money, but several rates according to the period of the loan required (or the maturity of the bill negotiated) and the character of the security offered. The published bank rate in India represents, I believe, the rate charged day by day for a loan advanced on such security as government paper. The interest on a loan of this kind, that is to say, is calculated day by day at the published bank rate prevailing on each day.

Type
Chapter
Information
Publisher: Royal Economic Society
Print publication year: 1978

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×