Economics · Banking and Monetary Policy
Which of the following best defines the term 'Bank Rate'?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The rate at which commercial banks park their surplus funds with the central bank
- 2The official interest rate at which the central bank (RBI) lends long-term funds to commercial banks✓
- 3The rate at which a commercial bank lends money to its best creditworthy customers
- 4The rate at which a commercial bank lends money to its retail customers
Correct answer
The official interest rate at which the central bank (RBI) lends long-term funds to commercial banks
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