Ready Forward (RF) Deal

Ready Forward (RF) Deal In effect, an RF is a secured short term (usually 15 – days) loan by one bank to another against government securities. Legally, the borrower sells the securities to the lending bank for cash, with the stipulation that at the end of the borrowing term it will by back the securities at a slightly higher price, the difference in price representing the interest. In practice, however, instead of physically parting with the government securities, the borrowing bank often hands over a Bank Receipt (BR) certifying that the securities are held in custody by a third bank. RF Deal is also called REPO or Repurchase Agreement.

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