What is 'Bank rate'? a) The rate at which commercial banks borrow money from RBI b) The rate at which commercial banks lend money to customers c) The rate at which commercial banks lend money to RBI d) none of the above

What is 'Bank rate'?
a) The rate at which commercial banks borrow money from RBI
b) The rate at which commercial banks lend money to customers
c) The rate at which commercial banks lend money to RBI
d) none of the above
by

1 Answer

Answer :

a) The rate at which commercial banks borrow money from RBI
Bank rate is the rate at which commercial banks can borrow money from the RBI. If
the rate is higher, then taking money from RBI becomes difficult, so the banks will
lend less to public. And vice-versa.
by

Related questions

By increasing the 'Bank Rate', the RBI can: a) provide incentives to commercial banks to lend more to public b) provide incentives to commercial banks to lend less to public c) increase the money supply in the market d) none of the above

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