Q.

Rate of interest is determined by -

A. The rate of return on the capital invested
B. Central Government
C. Liquidity preference
D. Commercial Banks
Answer» D. Commercial Banks
Explanation: Bank Rate is determined by the Reserve Bank of India. The rate of interest is determined by the commercial banks in India. As per RBI notification, banks are free todetermine rates of interest subject to BPLR and spread guidelines.
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