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Credit Creation

Base rate is ...

Question

Base rate is the rate below which no bank can allow their lending to anyone. Who sets up this base rate for banks?

A

Individual Banks Boards

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B

Ministry of Commerce

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C

Ministry of Finance

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D

RBI

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E

Interest Rate Commission of India

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Solution

The correct option is A Individual Banks Boards
Individual Banks Boards sets up the base rate which is the rate below which no bank can allow their lending to anyone.

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