The rate at which RBI borrows money from commercial banks within the country is called as _________.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Reverse Repo Rate
The reverse repo rate is the rate of interest the RBI pays when it borrows from commercial banks, that is, when banks park their surplus funds with the RBI against government securities. Raising it draws money out of the banking system and helps control inflation.
It is the reverse of the repo rate, the rate at which the RBI lends short-term money to banks.