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Bank Rates and Monetary Policy

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Multiple Choice

Bank Rate is an RBI tool for short-term measures. State how its review affects commercial banking.

(a) An increase in Bank Rate leads to increase in deposit rates as well as Prime Lending Rate (PLR) on the part of commercial banking.
(b) It reduces the EMI.

Which of the above statements is/are incorrect?

  1. (a) only
  2. (b) only
  3. Both (a) and (b)
  4. Neither (a) nor (b)
  5. Either (a) or (b)
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