MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Functions of the Central Bank

When RBI gran...

Question

When RBI grants a loan to commercial banks and charges interest on it, it is called _________.

A

Rapo rate

No worries! We‘ve got your back. Try BYJU‘S free classes today!

B

Reverse Rapo rate

No worries! We‘ve got your back. Try BYJU‘S free classes today!

C

Sweep stack rate, basic rate

No worries! We‘ve got your back. Try BYJU‘S free classes today!

D

Bank rate

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D Bank rate
A bank rate is the rate of interest which a central bank (RBI) charges on the loans and advances that it extends to commercial banks and other financial intermediaries. RBI uses this tool to control the money supply.

Suggest Corrections

thumbs-up

0

Similar questions

Q. When the RBI __________ the repo rate, the commercial banks in turn ___________ the rate of interest on loans for the public.

Q.  The rate of interest charged by RBI on the loans given to commercial banks is called bank rates.

Q. The rate at which RBI gives loans to the commercial banks is ________.

Q. Q. Consider the following statements with respect to Repo Rate:Which of the statements given above is/are correct?

1 only
2 only
Both 1 and 2
Neither 1 nor 2

Q. The rate at which the RBI gives loans to the commercial banks is _____.

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Functions of the Central Bank

ECONOMICS

Watch in App

explore_more_icon

Explore more

Functions of the Central Bank

Standard XII Economics

Join BYJU'S Learning Program

CrossIcon