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Question
When State Bank of India is under financial crisis and borrows money from Central Bank at a certain rate against approved securities, it will be called as ______.
Options
Interest rate
Lending rate
Reverse lending
Bank rate
Solution
When State Bank of India is under financial crisis and borrows money from Central Bank at a certain rate against approved securities, it will be called as Bank rate.
Explanation:
In times of financial crisis, the Central Bank charges commercial banks a bank rate, which is the interest rate they charge for loans secured by securities that have been approved.
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