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Match the LIST-I with LIST-II

LIST-ILIST-II
A. The RBI gives long term loans to the commercial banksI. Reverse repurchase agreement
B. The RBI buys the securities through an agreement having specification about date and price of resaleII. Open market operations
C. The RBI sell the securities through an agreement having specification about date and price at which it will be repurchasedIII. Repurchase agreement
D. Buying and selling of bonds issued by the government in the open marketIV. Bank Rate

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 1

Long-term lending by RBI to commercial banks is at the Bank Rate (A-IV). RBI buying securities with a specified date and price of resale is a repurchase (repo) agreement (B-III). RBI selling securities with a specified date and price of repurchase is a reverse repo agreement (C-I). Buying and selling government bonds in the open market is Open Market Operations (D-II).

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