The rate at which RBI purchases or rediscounts bills of exchange of commercial banks is called?

The rate at which RBI purchases or rediscounts bills of exchange of commercial banks is called?

[A] Repo rate

[B] Reverse repo rate

[C] Bank rate

[D] Base rate

Correct Answer: C [Bank rate]

Notes:

Bank Rate refers to the official interest rate at which RBI will provide loans to the banking system which includes commercial / cooperative banks, development banks etc. Such loans are given out either by direct lending or by rediscounting (buying back) the bills of commercial banks and treasury bills. Thus, the bank rate is also known as the discount rate. Bank rate is used as a signal by the RBI to the commercial banks on RBI’s thinking of what the interest rates should be.

Bank Rate and Repo Rate seem to be similar terms because in both of them RBI lends to the banks. However, Repo Rate is a short-term measure and it refers to short-term loans used for controlling the amount of money in the market. On the other hand, Bank Rate is a long-term measure and is governed by the long-term monetary policies of the RBI. In broader terms, bank rate is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. RBI uses this tool to control the money supply.

The rate at which RBI purchases or rediscounts bills of exchange of commercial banks is called?

[A] Repo rate

[B] Reverse repo rate

[C] Bank rate

[D] Base rate

Correct Answer: C [Bank rate]

Notes:

Bank Rate refers to the official interest rate at which RBI will provide loans to the banking system which includes commercial / cooperative banks, development banks etc. Such loans are given out either by direct lending or by rediscounting (buying back) the bills of commercial banks and treasury bills. Thus, the bank rate is also known as the discount rate. Bank rate is used as a signal by the RBI to the commercial banks on RBI’s thinking of what the interest rates should be.

Bank Rate and Repo Rate seem to be similar terms because in both of them RBI lends to the banks. However, Repo Rate is a short-term measure and it refers to short-term loans used for controlling the amount of money in the market. On the other hand, Bank Rate is a long-term measure and is governed by the long-term monetary policies of the RBI. In broader terms, bank rate is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. RBI uses this tool to control the money supply.

MORE QUESTIONS ABOUT INDIAN ECONOMY 

1.The base year for the calculation of all-India Index of Industrial Production (IIP) is:

2.Which of the following is not a correct statement with respect to Masala Bonds? 

3.Which among the following is an opposite activity of hedging in share / currency /future markets?

4.In which of the following countries first Stock Exchange opened?

5.Which among the following represents the accounting year of the Reserve Bank of India?

6.The portion of profits that a company distributes among its shareholders in the form of cash is usually known as _____?

7.Under which of the following laws, the Subsidiary Bank of the State Bank of India is constituted ?

8.IFSC is an alphanumeric code designed to uniquely identify the bank branches in India. This is an 11-digit code with the first four characters representing the bank’s code, the next character reserved as control character (currently, 0 appears in the fifth position) and remaining six characters to identify the branch. RBI has advised all banks to print IFSC on cheque leaves issued to customers. What is the full form for IFSC Code?

9.A monopolist will be able to maximize his profits when _________?

10.Which among the following banks was designated as the Agency for operationalisation of the Joint Investment Fund between India and Oman?

FOR MORE QUESTIONS ABOUT INDIAN ECONOMY

1.Recently, the Cabinet has approved the merger of 5 associate banks of SBI with the parent bank SBI. What will be the approximate market share of the banking giant produced via this merger?

2.The rate at which RBI purchases or rediscounts bills of exchange of commercial banks is called?

3.Which among the following organizations calculate and publish LIBOR (London Interbank Offered Rate)?

4.Hang-Seng is the share market index at which of the following?

5.Rs. 100 notes are printed in which of the following?

6.The concept of weaker sections under ‘priority sector’ was introduced on the recommendation of which of the following committees?

7.When a person has a savings account in the bank , the bank assumes the position of ___?

8.An investor or speculator who subscribes to a new issue with the intention of selling them soon after allotment to realize a quick profit is called?

9. What does the FDI trigger list consist of _______?

10. Which of the following companies introduced for the first time Traveller Cheques in the form of ‘circular notes’? 

11.From the following, bring out the one which is not a liability of a commercial bank?

12.Who among the following are the beneficiaries of Ways and Means Advances (WMA) facility of Reserve Bank of India?

13.Hundies are normally __________?

14.A monopolist will be able to maximize his profits when _________?

15.What is the frequency of availability of Overall WPI Index?

16.What was the name of the world currency that John Maynard Keynes conceptualized in the years 1940-42 and proposed at the Bretton Woods Conference?

17.Consider the following: 

18. Which among the following correctly represents Total Food Grains?

19.Consider the following statements

20.How many states of India are covered under the National Horticulture Mission?

21.Real National income increases in which of the following circumstances?

22.Who is the author of “Volatility and Growth”?

23.In which type of economy, competition doesn’t exist in the market?

24.Which sector do the red collar workers belong to?

25.Which sector employs the maximum population in the country?

26.What was the Indian economy share in the world economy immediately after Independence?

27.Which of the following is a reason for India to be a developing country?

28.In which year, the Planning commission scrapped?

29.what does food security mean?

30.What is the percentage of gross cropped area of oilseeds in the country?

Leave a Comment