The rate at which Banks borrow money from the Reserve Bank is called.....

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 rate at which Banks borrow money from the Reserve Bank is called____

A	Repo rate
B	Reverse repo rate
C	Bank rate
D	Base rate

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: -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-3: -The Reserve Bank of India (RBI) hiked the repo on 7 December 2022 by 35 basis points to 6.25%. Earlier, the Repo Rate was 5.90% and this is the fifth-rate hike in this financial year by the central bank. The RBI increased the repo rate by 40 bps in May and 50 bps in June, August, and September.

Detailed explanation-4: -The current repo rate is 6.25% as of 7th December 2022, while the reverse repo rate remains unchanged is 3.35%.

There is 1 question to complete.