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Bank rate is the rate of interest:
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- At which public borrows money from Commercial Banks
- At which public borrows money from R.B.I.
- At which Commercial Banks borrow money from R.B.I.
- At which Commercial Banks borrow money from the public
- At which public borrows money from Commercial Banks
Correct Option: C
Bank Rate is the interest rate at which a nation’s central bank lends money to domestic banks. Often these loans are very short in duration. Managing the bank rate is a preferred method by which central banks can regulate the level of economic activity. Regulation of the economy through management of the money supply is referred to as monetary policy.
