Home PYQs UPPSC UPPSC MCQs Prelims 2009 (GS Paper I)

Question

The Bank rate is the rate at which:

  1. a bank lends to the public
  2. the RBI lends to the public
  3. the RBI gives credit to the commercial banks
  4. the Government of India lends to other countries.

Answer:

Option C: the RBI gives credit to the commercial banks

Detailed Solution:

The correct answer is “the RBI gives credit to the commercial banks”.

The bank rate is the interest rate at which the Reserve Bank of India (RBI) lends short-term loans to commercial banks without collateral or a repurchase agreement. It's also known as the discount rate.