There is a decrease in Bank rate in an economy. Arrange the following statements relating to change in bank rate in the sequencing order :

(A) Loans taken by commercial bank become cheaper
(B) Increases money supply
(C) Bank rate is decreased by RBI
(D) Reserves held by commercial banks increases

Choose the correct answer from the options given below :

(C), (A), (D), (B)

When the bank rate is decreased, it becomes cheaper for commercial banks to borrow money from the central bank. This leads to an increase in the reserves held by commercial banks. As a result, commercial banks are able to lend more money to businesses and consumers. This increase in lending leads to an increase in the money supply.

Therefore, the correct sequencing of the events is (C), (A), (D), (B).