GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is a rate at which banks borrow rupees from 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 at which RBI sell government securities to banks
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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 refers to the rate at which commercial banks borrow money by selling their securities to the Central Bank of our country i.e. Reserve Bank of India (RBI) to maintain liquidity, in case of shortage of funds or due to some statutory measures. It is one of the main tools of RBI to keep inflation under control.
Detailed explanation-2: -The Reserve Bank of India (RBI) increased the repo rate on 8 February 2023 by 25 basis points to 6.50%. Earlier, the repo rate was 6.25%. The repo rate has been hiked by 250 basis points since May of 2022 in an effort to contain inflation.
Detailed explanation-3: -Answer: C. Q2. What is Repo Rate? a) Rate at which RBI allows temporary loan facilities to commercial banks against government securities only on the condition that the bank will repurchase the securities within a short period.