BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A major Public Sector Bank raised interest rates on loans by 25 basis points. This means the bank has raised interest by 25 basis points of
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Savings Bank Interest Rate
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Base Lending Rate
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Present Rates on Deposits
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Discounted Rates of Interest
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Explanation:
Detailed explanation-1: -Definition: Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.
Detailed explanation-2: -On the other hand, reverse repo rate is the interest rate paid to commercial banks when they deposit their excess funds in the central bank or when the central bank borrows money from them. As of April 2021, RBI’s repo rate stands at 4% and reverse repo rate at 3.35%.
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