The object of introducing base rate by RBI is.....begin{enumerate}item Enhancing transparency in lending rates of banksitem Enabling better assessment of transmission of monetary policyitem Keeping interest rates lowend{enumerate}

BANKING GENERAL KNOWLEDGE

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

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

The object of introducing base rate by RBI is____

A	1 and 2
B	Only 3
C	Only 2
D	All of above

Explanation:

Detailed explanation-1: -The base rate system, with a link to the banks’ cost of funds, was expected to facilitate better pricing of loans, enhance transparency in lending rates and improve the assessment of the transmission of monetary policy.

Detailed explanation-2: -Marginal Cost of Funds based Lending Rate (MCLR) is the minimum lending rate below which a bank is not permitted to lend. MCLR replaced the earlier base rate system to determine the lending rates for commercial banks. RBI implemented MCLR on 1 April 2016 to determine rates of interests for loans.

Detailed explanation-3: -Repo Rate (RR) is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks or financial institutions in India against government securities. The current Repo Rate 2022 is at 4.40%.

Detailed explanation-4: -The three objectives are: (1) Price Stability or Control of Inflation, (2) Economic Growth, and (3) Exchange Rate Stability.

There is 1 question to complete.