Match List-I with List-II:

Choose the correct answer from the options given below:

(A)-(II), (B)-(III), (C)-(I), (D)-(IV)

The correct answer is Option (2) → (A)-(II), (B)-(III), (C)-(I), (D)-(IV)

The correct matching of List-I with List-II is as follows:

• (A) Bank Rate - (II) Minimum rate at which funds are provided for long term.
• (B) Marginal Standing Facility - (III) Also known as Penal Interest Rate. Marginal standing facility (MSF) is a window for banks to borrow from the RBI in an emergency when inter-bank liquidity dries up completely. The Marginal standing facility is a scheme launched by RBI while reforming the monetary policy in 2011-12. It is a penal rate at which banks can borrow money from RBI when they are completely exhausted of all borrowing assistance. The Marginal Standing facility allows banks to borrow money with an interest rate above the repo rate and can be termed as the Marginal standing facility rate.
• (C) Repo Rate - (I) Securities are pledged in order to repurchase. When the central bank buys the security, this agreement of purchase also has specification about date and price of resale of this security. This type of agreement is called a repurchase agreement or repo.
• (D) Reverse Repo Rate -(IV) Central Bank borrows funds from commercial banks. When, instead of outright sale of securities, the central bank may sell the securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called a reverse repurchase agreement or reverse repo. The rate at which the money is withdrawn in this manner is called the reverse repo rate.