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Bank Rate implies the rate of interest:
- a)Paid by the Reserve Bank of India on the Deposits of Commercial Banks
- b)Charged by Banks on loans and advances
- c)Payable on Bonds
- d)At which the Reserve Bank of India discounts the Bills of Exchange
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of I...
Bank Rate is that rate of interest at which central bank of a country provides refinancing facilities to commercial banks. The bank rate, a benchmark rate at which RBI buys or re-discounts bills of exchange or other commercial papers eligible for purchase. Every bank needs refinancing as it is very difficult to match borrowings and flow of deposits.
Most Upvoted Answer
Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of I...
Bank Rate is the rate at which the Reserve Bank of India (RBI) is willing to discount bills of exchange or other commercial papers presented by commercial banks. This means that commercial banks can borrow money from the RBI by selling their bills of exchange at a discounted rate.
Explanation:
Bank Rate is an important monetary policy tool used by the RBI to regulate the money supply in the economy. It is used to signal the RBI's stance on interest rates and credit availability. Here's how Bank Rate works:
- When the RBI raises the Bank Rate, it becomes more expensive for commercial banks to borrow money from the central bank. This, in turn, increases the cost of credit for businesses and households, which reduces spending and slows down the economy.
- Conversely, when the RBI lowers the Bank Rate, it becomes cheaper for commercial banks to borrow money from the central bank. This reduces the cost of credit for businesses and households, which increases spending and stimulates the economy.
Bank Rate is usually higher than the repo rate, which is the rate at which commercial banks borrow money from the RBI for short-term purposes. This is because Bank Rate is used for longer-term borrowing, while the repo rate is used for short-term borrowing.
Conclusion:
Bank Rate is an important tool used by the RBI to regulate the money supply in the economy. It is used to signal the RBI's stance on interest rates and credit availability. Commercial banks can borrow money from the RBI by selling their bills of exchange at a discounted rate, which is determined by the Bank Rate.
Explanation:
Bank Rate is an important monetary policy tool used by the RBI to regulate the money supply in the economy. It is used to signal the RBI's stance on interest rates and credit availability. Here's how Bank Rate works:
- When the RBI raises the Bank Rate, it becomes more expensive for commercial banks to borrow money from the central bank. This, in turn, increases the cost of credit for businesses and households, which reduces spending and slows down the economy.
- Conversely, when the RBI lowers the Bank Rate, it becomes cheaper for commercial banks to borrow money from the central bank. This reduces the cost of credit for businesses and households, which increases spending and stimulates the economy.
Bank Rate is usually higher than the repo rate, which is the rate at which commercial banks borrow money from the RBI for short-term purposes. This is because Bank Rate is used for longer-term borrowing, while the repo rate is used for short-term borrowing.
Conclusion:
Bank Rate is an important tool used by the RBI to regulate the money supply in the economy. It is used to signal the RBI's stance on interest rates and credit availability. Commercial banks can borrow money from the RBI by selling their bills of exchange at a discounted rate, which is determined by the Bank Rate.
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Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer?
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Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer? for Defence 2024 is part of Defence preparation. The Question and answers have been prepared according to the Defence exam syllabus. Information about Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Defence 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer?.
Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer? for Defence 2024 is part of Defence preparation. The Question and answers have been prepared according to the Defence exam syllabus. Information about Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Defence 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Bank Rate implies the rate of interest:a)Paid by the Reserve Bank of India on the Deposits of Commercial Banksb)Charged by Banks on loans and advancesc)Payable on Bondsd)At which the Reserve Bank of India discounts the Bills of ExchangeCorrect answer is option 'D'. Can you explain this answer?.
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