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Cost of Funds

   Also found in: Acronyms 0.01 sec.
Cost of funds
Interest rate associated with borrowing money.

Cost of Funds
The amount of money paid in interest on a loan. The cost of funds is an expense for both personal and business loans. It also refers to the interest rate in addition to the absolute amount in interest.


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To determine an acceptable net interest margin on an ongoing basis, credit unions must assess what impact they would see from a period of higher prime rates that raises their cost of funds and determine how protected they are from any negative effects.
This reduction is in line with the prevailing monetary policy of the RBI, lower deposit rates and overall cost of funds.
A statement said: "These decisions are a direct result of the extreme volatility and greatly increasing cost of funds on the global wholesale markets.
 
 
 
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