McqMate
| Q. |
Bank rate is that rate on which - |
| A. | Any bank lends money to an individual |
| B. | State Bank of India gives loan to the rural banks |
| C. | Central Bank of Country lends money to the commercial banks |
| D. | Rural bank gives loan to cooperative societies |
| Answer» C. Central Bank of Country lends money to the commercial banks | |
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Explanation: Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances to a commercial bank. Repo (Repurchase) rate is the rate at which the central bank lends short- term money to the banks against securities. A reduction in the repo rate will help banks to get money at a cheaper rate. The reverse repo rate is the rate at which the banks park surplus funds with reserve bank, while the repo rate is the rate at which the banks borrow from the central bank. |
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