Interbank Loan

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Interbank Loan

A loan that one bank makes to another. Interbank loans may be made to ensure that banks meet their capital requirements at the end of each day. Interbank loans involving a central bank may be a way to control the money supply. Interbank loans must be repaid with interest in a stated period of time, often within a day. In such cases, interbank loans are called overnight loans.
References in periodicals archive ?
Joes Luis Zapatero, Spain's prime minister, said that the government would cover up to 100bn euros in inter-bank loans, but stopped short of announcing a recapitalisation scheme.
By implementing preventive measures such as the guarantee of deposits, savings and inter-bank loans, the federal government has sent a clear message to investors emphasising the stability of the UAE's fin-ancial system, and alleviating any ill-founded concerns about the financial health of UAE banks.
It will also focus on finance leasing, taking fixed deposits of one year or more from shareholders, accepting leasing deposit from lessees, transferring rental receivables to commercial banks, issuing financial bonds upon approval, providing inter-bank loans, obtaining loans from financial institutions, obtaining foreign exchange loans from overseas, selling and disposing of residual value of leased items, economic consulting and any other business approved by the China Banking Regulatory Commission.
Called as Negotiable Certificates of Deposit (NCDs), the securities, will enable banks to convert surplus deposits that they would otherwise deposit at the NBC for a tiny interest rate into securities that they can immediately sell or utilize as collateral for inter-bank loans.
The Treasury has already committed pounds 250billion to guarantee inter-bank loans following the Northern Rock crisis.
The plan is comprised of a maximum of EUR320bn euros for the country's inter-bank loans, and EUR40 billion euros at most for capitalisation of French banks.

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