Question

At which rate, Reserve Bank of India borrows money from commercial banks?

• A. Bank Rate
• B. Repo Rate
• C. Reverse Repo Rate
• D. Statutory Liquidity Rate

Answer 1

Answer:

C. Reverse Repo Rate

Reverse repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) borrows money from commercial banks within the country. It is a monetary policy instrument which can be used to control the money supply in the country.