Question : The rate at which the RBI lends to commercial banks is called:
Option 1: CRR
Option 2: SLR
Option 3: Repo rate
Option 4: Reverse repo rate
Correct Answer: Repo rate
Solution : The correct answer is (c). Repo rate
The rate at which the Reserve Bank of India (RBI) lends to commercial banks is called the repo rate. Repo stands for repurchase agreement, and it is a mechanism through which the RBI provides short-term liquidity to banks against government securities. When banks face a shortage of funds, they can borrow money from the RBI by selling their eligible securities and agreeing to repurchase them at a future date. The interest rate charged on these transactions is the repo rate. It is an important tool used by the RBI to regulate liquidity in the banking system and influence the cost of borrowing in the economy.
Question : The rate at which the RBI borrows from commercial banks is called:
Question : ___________ is the rate at which the central bank borrows money from commercial banks.
Option 1: Repo rate
Option 2: Reverse repo rate
Option 3: Cash reserve ratio (CRR)
Option 4: Statutory liquidity ratio (SLR)
Question : The rate at which RBI gives short-term loans to commercial banks is called:
Option 1: repo rate
Option 2: reverse repo rate
Option 3: bank rate
Option 4: cash reserve rate
Question : The bank rate is the rate at which:
Option 1: RBI borrows from commercial banks
Option 2: RBI lends to commercial banks
Option 3: Commercial banks lend to customers
Option 4: Commercial banks borrow from RBI
Question : What is the meaning of reverse repo rate?
Option 1: The rate at which RBI borrows money from foreign banks.
Option 2: The rate at which RBI borrows money from commercial banks.
Option 3: The rate at which commercial banks borrow money from RBI.
Option 4: The rate at which commercial banks borrow money from foreign banks.
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