Economics · Monetary Policy

Which of the following statements best defines the term 'Bank Rate'?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1The minimum interest rate below which banks are not allowed to lend to the general public
2The rate at which commercial banks deposit their short-term surplus funds with the RBI
3The interest rate that commercial banks charge from their prime corporate customers
4The rate at which the Reserve Bank of India lends long-term funds to commercial banks✓

Correct answer

The rate at which the Reserve Bank of India lends long-term funds to commercial banks

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