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Economics (Part – XII)

📆 April 5, 2025

Total Questions: 50

1. What is the bank rate? [S.S.C. Online C.G.L.(T-I) 3.09.2016 (Shift-II)]

Correct Answer: (a) The rate at which the central bank of a country gives loans to other banks in the country.
Solution:Bank rate is the rate at which the central bank of a country lends to other banks in the country. The RBI allows short-term loans with the presence of collateral. This is known as Repo Rate. Bank Rates in India are determined by the RBI. It is usually higher than a Repo Rate on account of its ability to regulate liquidity. The current Bank Rate is 5.15%.

2. Which of the following is the correct definition of bank rate? [S.S.C. Online CHSL (T-I) 11.08.2021 (Shift-II)]

Correct Answer: (d) It is the rate of interest payable by commercial banks to RBI.RBI
Solution:

Bank rate is the rate of interest payable by commercial banks to RBI.

3. At what rate does the Reserve Bank of India lend to commercial banks? [S.S.C. Online MTS (T-I) 19.08.2019 (Shift-II)]

Correct Answer: (d) Bank Rate
Solution:

The rate at which the Reserve Bank of India lends money to commercial banks is called bank rate.

4. The SLR is determined by the RBI. SLR stands for________. [SS.C. Online CHSL (T-I) 23.01.2017 (Shift-I)]

Correct Answer: (c) Statutory Liquidity Ratio
Solution:The SLR is determined by the RBI. SLR stands for Statutory liquidity ratio. It is the Government term for the reserve requirement that commercial banks are required to maintain in the form of cash, gold reserves, Govt. bonds and other Reserve Bank of India (RBI)- approved securities before providing credit to the customers.

5. The interest rate charged by banks on short-term loans to their largest, most secure and most creditworthy customers is called______. [S.S.C. Online C.G.L. (T-I) 11.06.2019 (Shift-III)]

Correct Answer: (a) Prime Lending Rate
Solution:The interest rate charged by banks on short-term loans to their largest, most secure and most creditworthy customers is called prime lending rate.

6. What is the full form of CRR? [S.S.C. Online C.P.O.S.I. (T-I) 5.07.2017 (Shift-II)]

Correct Answer: (b) Cash Reserve Ratio
Solution:Cash reserve ratio (CRR) is the percentage of a bank's total deposits that it needs to maintain as liquid cash. This is an RBI requirement, and the cash reserve is kept with the RBI. A bank does not earn interest on this liquid cash maintained with the RBI and neither can it use this for investing and lending purposes.

7. Cash Reserve Ratio (CRR) is calculated as a percentage of each bank's_______. [S.S.C. Online C.G.L. (T-I) 11.06.2019 (Shift-III)]

Correct Answer: (b) net demand and time liabilities
Solution:Cash Reserve Ratio (CRR) is calculated as a percentage of each bank's savings of customers.

8. The percentage of deposits which a bank must keep as cash reserves with itself is known as_______. [S.S.C. Online MTS (T-I) 19.08.2019 (Shift-I)]

Correct Answer: (b) Cash Reserve Ratio
Solution:The percentage of deposits that a bank must keep as cash reserves itself is known as Cash Reserve Ratio.

9. The rate at which RBI gives short term loan to commercial Banks is called- [S.S.C. Online C.G.L. (T-I) 6.09.2016 (Shift-III)]

Correct Answer: (a) Repo rate
Solution:The rate at which RBI gives short term loans to commercial banks against securities is known as Repo rate. A reduction in the repo rate helps banks to get money at a cheaper rate. When the repo rate increases, borrowing from the central bank becomes more expensive. In contrast, the reverse repo rate is the rate at which banks can park surplus funds with RBI.

10. __________is the rate at which commercial banks borrow from the Reserve Bank of India (RBI) in case of shortage of funds. [S.S.C. Online Constable GD 2.03.2019 (Shift-I)]

Correct Answer: (c) Repo Rate
Solution:The rate at which RBI gives short term loans to commercial banks against securities is known as Repo rate. A reduction in the repo rate helps banks to get money at a cheaper rate. When the repo rate increases, borrowing from the central bank becomes more expensive. In contrast, the reverse repo rate is the rate at which banks can park surplus funds with RBI.
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