Q. The rate at which the Reserve Bank of India gives short term loans to commercial banks is called?
Answer: Repo rate
Notes: The rate at which RBI gives short-term loans against securities to commercial banks is known as repo rate. Reduction in repo rate helps banks to get money at a cheaper rate. When the repo rate rises, it becomes more expensive to borrow from the central bank. Conversely, the reverse repo rate is the rate at which banks can deposit surplus funds with the RBI.