Which of the following definitions are correct?begin{enumerate}item Basis points: increase in interest rates in percentage terms.item Repo rate: rate at which commercial banks borrow from the RBI by selling their securities or financial assets to the RBI for a long-period of time.item Reverse repo rate: rate of interest at which the central bank borrows funds from other banks for a short duration.item Cash reserve ratio: minimum percentage of cash deposits that banks must keep with itself to avoid liquidity issues.end{enumerate}

BANKING GENERAL KNOWLEDGE

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

Which of the following definitions are correct?

A	(1) & (2)
B	(2), (3) & (4)
C	(2) & (4)
D	(3) & (4)

Explanation:

Detailed explanation-1: -The repo rate increases are intended to make credit costlier; banks generally pass on the increased costs to customers and loans become costlier. Expensive credit dampens consumer demand, resulting in a corresponding drop in demand for goods and services.

Detailed explanation-2: -On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (February 8, 2023) decided to: Increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50 per cent with immediate effect.

Detailed explanation-3: -The rate at which the RBI lends money to commercial banks is called Repo rate.

There is 1 question to complete.