Practicing Success

Target Exam

CUET

Subject

General Test

Chapter

General Knowledge

Topic

Economics

Question:

Which of the following option denotes the rate at which commercial banks borrow from central bank for a short period of time against the approved securities?

Options:

Reverse repo rate

Repo rate

Bank rate 

Marginal standing facility rate

Correct Answer:

Repo rate

Explanation:

When commercial banks require funds for a small period of time, they borrow from reserve bank of India against approved security. The rate charged for the same is called as repo rate.