HSC Science (Computer Science) 12th Board ExamMaharashtra State Board
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Define Or Explain the Following Concept.Bank Rate. - HSC Science (Computer Science) 12th Board Exam - Economics

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Question

Define or explain the following concept.

Bank Rate.

Solution

Bank Rate

(i) It is the rate at which central bank (RBI) lends money to commercial banks by discounting bills of exchange.

(ii) It acts as a guide line to the banks for fixing interest rates. If bank rate increases, interest rate wills goes up, and vice-versa.

(iii) The bank rate is decided by the Central Bank. In April 2010, the bank rate was maintained at 6% p.a

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APPEARS IN

 2010-2011 (March) (with solutions)
Question 2.1.2 | 2.00 marks
 2016-2017 (March) (with solutions)
Question 2.1.6 | 2.00 marks
Solution Define Or Explain the Following Concept.Bank Rate. Concept: Central Bank Function - Controller of Credit.
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