BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is a rate at which RBI sell government securities to banks
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The rate at which banks borrow money from the RBI by selling their surplus government securities to RBI
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It is a rate at which RBI allows small loans in the market
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It is a rate which is offered by Banks to their most valued customers or prime customers
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Detailed explanation-1: -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%. Changes in Repo Rate affect the flow of money in the market.
Detailed explanation-2: -Repo rate is the rate at which commercial banks borrow money from the central bank of a country (which in the case of India is the Reserve Bank of India or RBI) when they are in the need of funds.
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 rate of interest at which commercial banks borrow money from the RBI is called the repo rate.