GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following is the rate at which the RBI lends money to commercial banks in the event of any shortfall of funds?
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Bank Rate
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Repo Rate
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Annual Percentage Rate
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Benchmark Prime Lending Rate
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Explanation:
Detailed explanation-1: -Definition: Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.
Detailed explanation-2: -Cash Reserve Ratio (CRR) is the percentage of money, which a bank has to keep with RBI in the form of cash. Whereas, Statutory Liquidity Ratio (SLR) is the proportion of liquid assets to time and demand liabilities.
Detailed explanation-3: -After the latest hike in the repo rate on 7 December 2022, the Marginal Standing Facility (MSF) Rate stands at 6.75%. The Cash Reserve Ratio (CRR) currently remains unchanged at 4.50%.
There is 1 question to complete.