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Question
Who controls the interest rate at which commercial banks borrow from the central bank?
Who controls the interest rate at which commercial banks borrow from the central bank?
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Solution
The correct option is C Reserve Bank of India
The Reserve Bank of India, also called the RBI, controls the circulation of money in the economy through several strategies called monetary tools. Being the central bank of India, it has the authority to control the rate of interest on loans and savings. It also controls the interest rate at which commercial banks borrow from the central bank.
The Reserve Bank of India, also called the RBI, controls the circulation of money in the economy through several strategies called monetary tools. Being the central bank of India, it has the authority to control the rate of interest on loans and savings. It also controls the interest rate at which commercial banks borrow from the central bank.
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