The rate at which Reserve Bank of India gives loans to the commercial Bank for longer duration:
- Repo Rate.
- Reverese Repo Rate.
- Bank Rate.
- Saving Rate.
The rate at which Reserve Bank of India gives loans to the commercial Bank for longer duration:
- Repo Rate.
- Reverese Repo Rate.
- Bank Rate.
- Saving Rate.
Solution
Option 1 -> Repo Rate is for short-term lending (overnight to 14 days), not longer duration.
Option 2 -> Reverse Repo Rate is when RBI borrows from banks, not lends to them.
Option 3 -> Bank Rate is the rate at which RBI lends to commercial banks for longer duration.
Option 4 -> Saving Rate is interest offered on savings accounts, unrelated to RBI lending.
Hence, Option 3: Bank Rate -> Bank Rate is the rate at which Reserve Bank of India provides long-term loans to commercial banks without any collateral requirement. Unlike Repo Rate which is used for short-term lending (typically overnight to 14 days), Bank Rate is specifically meant for longer duration lending and also serves as a reference rate for various other lending rates in the banking system. -> correct
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