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Bank rate is for -

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Question

Bank rate is for ______

Options

  • Commercial banks by the government

  • Commercial banks by the central bank

  • Central banks by the central bank

  • Central bank by the commercial banks

MCQ
Fill in the Blanks

Solution

The bank rate is for Commercial banks by the central bank

Explanation:

The LRR (Legal reserve ratio) permits commercial banks to maintain a portion of their deposits in reserve while using the balance to extend loans. This process' cycle of transactions aids in the creation of money.

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Central Bank: Functions
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