Practicing Success
Bank Rate is : |
The rate of interest at which RBI gives loans to industries The rate at which RBI gives loans to the commercial banks The rate of interest at which Agricultural Banks give loans to the farmers The rate of interest at which Co-operative banks give loans to the customers. |
The rate at which RBI gives loans to the commercial banks |
The correct answer is option (2) : The rate at which RBI gives loans to the commercial banks The Bank Rate is the rate at which the central bank (in this case, the Reserve Bank of India or RBI) lends money to commercial banks. This rate is a tool used by the central bank to control the money supply in the economy and to influence the overall level of economic activity. |