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Consider the following statements regarding Repo Rate:
A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.
B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.
C. It is the rate at which Commercial Banks keep deposits with RBI.
D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.
Which of the above mentioned statements are NOT correct?
- a)A and C
- b)B and C
- c)C and D
- d)A and D
- e)B and D
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements regarding Repo Rate:A. It is the ra...
Repo Rate is the rate at which RBI lends to its clients generally against Government Securities. Reduction in Repo Rate helps Commercial Banks to get money at a cheaper rate and increase in Repo Rate discourages Commercial Banks to get money as the rate increases and becomes expensive.
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Consider the following statements regarding Repo Rate:A. It is the ra...
Explanation:
Repo rate is the rate at which the central bank (in this case, the Reserve Bank of India or RBI) lends money to commercial banks against government securities. It is an important tool used by the central bank to control inflation and stabilize the economy.
Let's analyze each statement to determine which ones are correct and incorrect:
A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.
This statement is correct. Repo rate is the rate at which the RBI lends money to commercial banks in exchange for government securities as collateral. This helps the central bank inject liquidity into the banking system.
B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.
This statement is incorrect. Reverse repo rate is the rate at which the RBI borrows money from commercial banks by lending them government securities. It is the opposite of the repo rate.
C. It is the rate at which Commercial Banks keep deposits with RBI.
This statement is incorrect. The rate at which commercial banks keep deposits with the RBI is known as the reverse repo rate. It is the rate at which the RBI borrows money from commercial banks, not the rate at which commercial banks keep deposits with the RBI.
D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.
This statement is correct. When the repo rate is reduced, it becomes cheaper for commercial banks to borrow money from the RBI. This encourages banks to borrow more, which increases liquidity in the banking system and can stimulate economic growth.
Based on the analysis above, we can conclude that statement B and C are incorrect. Therefore, the correct answer is option 'B' - B and C.
Repo rate is the rate at which the central bank (in this case, the Reserve Bank of India or RBI) lends money to commercial banks against government securities. It is an important tool used by the central bank to control inflation and stabilize the economy.
Let's analyze each statement to determine which ones are correct and incorrect:
A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.
This statement is correct. Repo rate is the rate at which the RBI lends money to commercial banks in exchange for government securities as collateral. This helps the central bank inject liquidity into the banking system.
B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.
This statement is incorrect. Reverse repo rate is the rate at which the RBI borrows money from commercial banks by lending them government securities. It is the opposite of the repo rate.
C. It is the rate at which Commercial Banks keep deposits with RBI.
This statement is incorrect. The rate at which commercial banks keep deposits with the RBI is known as the reverse repo rate. It is the rate at which the RBI borrows money from commercial banks, not the rate at which commercial banks keep deposits with the RBI.
D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.
This statement is correct. When the repo rate is reduced, it becomes cheaper for commercial banks to borrow money from the RBI. This encourages banks to borrow more, which increases liquidity in the banking system and can stimulate economic growth.
Based on the analysis above, we can conclude that statement B and C are incorrect. Therefore, the correct answer is option 'B' - B and C.
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Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer?
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Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer? for Banking Exams 2024 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Banking Exams 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer?.
Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer? for Banking Exams 2024 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Banking Exams 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Repo Rate:A. It is the rate at which RBI lends money to Commercial Banks generally against Government Securities.B. It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities.C. It is the rate at which Commercial Banks keep deposits with RBI.D. Reduction in Repo Rate helps commercial banks to get money at cheaper rates.Which of the above mentioned statements are NOT correct?a)A and Cb)B and Cc)C and Dd)A and De)B and DCorrect answer is option 'B'. Can you explain this answer?.
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