The correct answer is option 'D', which states that the rate of interest charged by moneylenders is much higher than that charged by banks. This answer is based on the general observation and understanding of the lending practices of both moneylenders and banks.

Moneylenders are individuals or small-scale lenders who provide loans to individuals or businesses. They typically operate outside the formal banking system and often cater to borrowers who may not have access to traditional banking services due to various reasons such as poor credit history or lack of collateral. On the other hand, banks are financial institutions that are regulated by central banks and offer a wide range of banking services, including lending.

Now, let us discuss the reasons why the rate of interest charged by moneylenders is much higher than that charged by banks:

1. Risk Assessment: Moneylenders often lend to borrowers with poor credit histories or limited financial resources. These borrowers are considered higher risk, and moneylenders charge a higher interest rate to compensate for the increased risk of default. In contrast, banks have more rigorous risk assessment processes and can offer lower interest rates to borrowers with better creditworthiness.

2. Operational Costs: Moneylenders often have higher operational costs compared to banks. They may need to cover expenses such as advertising, traveling, or legal fees, which may lead to higher interest rates. Banks, on the other hand, benefit from economies of scale and have lower operational costs, allowing them to offer competitive interest rates.

3. Regulation and Compliance: Banks are subject to strict regulations and oversight by central banks and other regulatory authorities. These regulations ensure that banks follow ethical lending practices and protect the interests of borrowers. Moneylenders, on the other hand, operate in a less regulated environment, which allows them to charge higher interest rates without much scrutiny.

4. Access to Funds: Banks have access to a wide range of funding sources, including customer deposits and borrowing from other financial institutions. This allows them to secure funds at lower interest rates, which they can then pass on to borrowers in the form of lower interest rates. Moneylenders, on the other hand, often rely on their own capital or borrowing from informal sources, which come at higher costs.

In conclusion, the rate of interest charged by moneylenders is much higher than that charged by banks. This is primarily due to the higher risk associated with moneylending, higher operational costs, lack of regulation, and limited access to low-cost funding sources. It is important for borrowers to carefully evaluate the terms and conditions of any loan before borrowing from moneylenders to ensure that they are not subjected to exorbitant interest rates.