GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Liquidity
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Cash holdings of banks
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Financial position of banks
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Money supply, volume of bank credit and cost of bank credit
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Detailed explanation-1: -Bank Rate is the rate or discount at which RBI grants loans or advances to commercial banks. Hence, it is also called Discount Rate. The money that commercial banks repay to RBI is the interest amount on the loans.
Detailed explanation-2: -A bank rate is the interest rate a nation’s central bank charges other domestic banks to borrow funds. Nations change their bank rates to expand or constrict a nation’s money supply in response to economic changes. In the United States, the discount rate has remained unchanged at 0.25% since March 15, 2020.
Detailed explanation-3: -The different instruments of credit control used by the Reserve Bank of India are Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), the Bank Rate Policy, Selective Credit Control (SCC), Open Market Operations (OMOs).