The rate on which banks borrow from the RBI is called.....[Punjab & Sindh 2010]

BANKING GENERAL KNOWLEDGE

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

The rate on which banks borrow from the RBI is called____[Punjab & Sindh 2010]

A	SLR
B	CRR
C	Interest Rate
D	Repo Rate

Explanation:

Detailed explanation-1: -Reserve Bank of India (RBI), the central banking institution of India controls the monetary policy of the Indian currency. The key repo rate has been hiked on 7 December 2022 by the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) by 35 basis point to 6.25%.

Detailed explanation-2: -(i) Bank rate relates to the loans offered by(i) Repo rate relates to the loans offered bythe RBI to the commercial banks withoutthe RBI to the commercial banks, NOTany collateral (security for purpose of loans). without collateral. The securities arepledged as a security for the loans.

Detailed explanation-3: -2.2. Repo is a money market instrument, which enables collateralised short term borrowing and lending through sale/purchase operations in debt instruments. Under a repo transaction, a holder of securities sells them to an investor with an agreement to repurchase at a predetermined date and rate.

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