GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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RBI
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Individual Banks Board
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Interest Rate Commission of India
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None of the above
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Detailed explanation-1: -The base rate is calculated by the country’s central regulatory body, the Reserve Bank of India. The RBI determines the base rate in order to bring uniform rates to all Indian banks, whether they are nationalized banks or they belong to the private sector.
Detailed explanation-2: -As mentioned in the above sections, base rate is the minimum rate set by the RBI, below which commercial banks cannot lend to borrowers. A variety of factors are considered when calculating the base rate.
Detailed explanation-3: -The RBI decides interest rate periodically and takes decisions whether to hike/slash the rate or leave it unchanged.
Detailed explanation-4: -It was in keeping with this that the Reserve Bank introduced the base rate system in July 2010, which was replaced by the marginal cost of funds based lending rate (MCLR) system in April 2016.