Question

Bank rate is the selective credit control measure used by the central bank of the country.

• A. True
• B. False

Answer 1

The correct option is B False

Bank rate is the rate charged on the loans offered by the Central bank to the commercial banks without any collateral. Bank rate is a quantitative credit control measure under the monetary policy of the government as it controls the overall supply of the money in the economy. It is increased at the time of inflation to reduce the total money supply in the economy and decreased at the time of deflation to increase the total money supply in the economy.