Full formBanking & Finance
ABRstands forAdjusted Bank Rate
Full Form of ABR
What is ABR?
The Adjusted Bank Rate (ABR) is the interest rate at which the central bank of a country, in India the Reserve Bank of India (RBI), lends funds to commercial banks against eligible securities or collateral. Unlike the repo rate, which is for short-term repurchase agreements, the ABR is a broader benchmark that reflects the long-term cost of borrowing for banks and is adjusted periodically based on market conditions and economic outlook. In India, the ABR is a less frequently used tool compared to repo and reverse repo rates, but it remains significant for signaling monetary policy stance. It influences the base lending rates of commercial banks, thereby affecting credit flow, investment, and consumption in the economy. The ABR is particularly relevant for understanding the RBI’s monetary policy framework and is often discussed in the context of inflation control and economic stability. For students preparing for banking and finance exams such as RBI Grade B, NABARD, and SEBI, knowledge of ABR is essential. It is also used by economists and analysts to gauge the central bank’s long-term policy direction. The ABR is adjusted based on factors like inflation, GDP growth, and global interest rates.
ABR का फुल फॉर्म
समायोजित बैंक दर
Example
The RBI’s decision to hike the Adjusted Bank Rate by 25 basis points led to a rise in home loan rates across major Indian banks.
ABR — frequently asked questions
What is the full form of ABR?
The full form of ABR is Adjusted Bank Rate.
What is the difference between ABR and Repo Rate?
ABR (Adjusted Bank Rate) is the rate at which RBI lends to commercial banks, adjusted for market conditions, while Repo Rate is the rate for short-term borrowing against securities. ABR is broader and used less frequently.
How does ABR affect the Indian economy?
Changes in ABR influence lending rates of banks, affecting borrowing costs for businesses and individuals, thereby impacting inflation and economic growth.