Bank Rate is defined as the rate at which:
[A] RBI lends short term loans to commercial banks
[B] a commercial bank can lend to its customers
[C] RBI lends long term loans to commercial banks
[D] the commercial banks are able to borrow overnight funds from RBI
Show Answer
Correct Answer: C [RBI lends long term loans to commercial banks ]
Notes:
Bank rate is the rate of interest which a central bank charges on the long term loans and advances that it extends to commercial banks and other financial intermediaries.
