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Interbank Overnight Loan


An interbank loan that is extended over a short-term and for an interest rate quoted for overnight lending. It is a short-term loans that mature the next day. Overnight loans involve an agreement between a lender and a borrower that the former lends the latter funds only overnight, i.e., the borrower must repay the amount borrowed plus interest at the start of business the next day.

Overnight lending takes the form of call money (loans extended at call money rates) and day-to-day loans, which together play a predominant role in interbank money lending and
between banks and money market dealers.



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Banking is an integral part of the modern financial system and plays an important role in an economy. It basically involves the so-called intermediation (e.g., ...
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