Question : What is the bank rate?
Option 1: The rate at which the Central bank of a country advances loans to other banks in the country.
Option 2: The rate at which banks advance loans to customers.
Option 3: The rate at which banks lend among themselves.
Option 4: The rate at which banks lend to money lenders.
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Correct Answer: The rate at which the Central bank of a country advances loans to other banks in the country.
Solution : The correct option is the Rate at which the Central bank of a country advances loans to other banks in the country.
The rate at which a central bank like RBI loans money to commercial banks and other financial institutions is known as the bank rate. When a central bank raises the bank rate, commercial banks must pay more to borrow money from the central bank. Commercial banks might, therefore, increase the interest rates they impose on consumer loans as a result.
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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 interest rate at which the Reserve Bank of India provides overnight liquidity to banks is called ________.
Option 1: Reverse repo rate
Option 2: Marginal standing facility rate
Option 3: Repo rate
Option 4: Leverage rate
Question : Which of the following is an institutional source of credit in India?
Option 1: Money lenders
Option 2: Commission agents
Option 3: Traders
Option 4: Commercial banks
Question : Which of the following is not the function of the central bank of the country?
Option 1: It controls money supply of the country.
Option 2: It acts as a banker to the government.
Option 3: It accepts deposits from the public.
Option 4: It issues the currency of the country.
Question : The ________ and _______ determine the corridor for the daily movement in the weighted average call money rate.
Option 1: Reverse repo rate, discount rate
Option 2: Marginal Standing Facility, reverse repo rate
Option 3: Liquidity adjustment facility, repo rate
Option 4: Bank rate, repo rate
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