Sub-section 12AB of Section 17 of the Reserve Bank of India Act, 1934 defines the term as an instrument for borrowing funds by selling securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to repurchase the said securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed?

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Bank rate
B	LAF
C	Repo
D	CRR

Explanation:

Detailed explanation-1: -Section 17 of the Act defines the manner in which the RBI (the central bank of India) can conduct business. The RBI can accept deposits from the central and state governments without interest. It can purchase and discount bills of exchange from commercial banks.

Detailed explanation-2: -Amendment of section 17 of Act 2 of 1934. “(1A) The accepting of money as deposits, repayable with interest, from banks or any other person under the Standing Deposit Facility Scheme, as approved by the Central Board, from time to time, for the purposes of liquidity management; ".

Detailed explanation-3: -In terms of Section 20 of the RBI Act 1934, RBI has the obligation to undertake the receipts and payments of the Central Government and to carry out the exchange, remittance and other banking operations, including the management of the public debt of the Union.

Detailed explanation-4: -Section 17 in The Reserve Bank of India Act, 1934.

There is 1 question to complete.