BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Money borrowed or lent for a day or overnight
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Money borrowed for more than one day but up to 3 days
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Money borrowed for more than one day but up to 7 days
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Money borrowed for more than one day but up to 14 days
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Detailed explanation-1: -Call money is associated with the day-to-day cash requirement of banks. When banks face cash shortage, they borrow from other commercial banks for a short period of 1-14 days. When banks borrow for one day it is known as call-money.
Detailed explanation-2: -’Call Money’ is the borrowing or lending of funds for 1day.
Detailed explanation-3: -What is overnight call money rate? Overnight call money rates, the interest rates at which banks lend money to each other, are on the rise despite liquidity remaining in the surplus mode.
Detailed explanation-4: -The correct option is A loan. The amount of money borrowed from the bank is called the loan, and the extra amount of money paid back to the bank other than the loan is called the interest.
Detailed explanation-5: -Example of the Call Money Rate 2 Broker ABC is looking to purchase 1, 000 shares of Apple Inc. for a large client that’s looking to buy the shares on margin. The client will pay the broker in full within 30 days. The broker will then borrow the needed money from a bank so that the client can buy shares now.