Multiple choice

Bank rate is the rate

  1. at which RBI lends to the public

  2. at which government of India lends to other countries

  3. at which the RBI extends credit to commercial banks

  4. at which a bank lends to the public
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Bank rate is the rate at which the Reserve Bank of India (RBI) extends credit to commercial banks, typically for long-term loans. It is a monetary policy tool used to control money supply and inflation. The rate at which banks lend to the public is called the prime lending rate, not bank rate.

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