Question

    Which rate is referred to as the 'lender of last resort' for banks?

    A Repo Rate Correct Answer Incorrect Answer
    B Bank Rate Correct Answer Incorrect Answer
    C Reverse Repo Rate Correct Answer Incorrect Answer
    D Marginal Standing Facility (MSF) Rate Correct Answer Incorrect Answer
    E Cash Reserve Ratio (CRR) Correct Answer Incorrect Answer

    Solution

    The Bank Rate is the rate at which the central bank (RBI) lends money to commercial banks without any security, often referred to as the 'lender of last resort'.

    Practice Next

    Relevant for Exams: