Consider the following statements:
1. Bank rate is the interest rate which the Reserve Bank of India (RBI) charges on its long-term lendings.
2. Bank rate has been fully aligned with the Marginal Standing Facility.
Which of the statements given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
· The interest rate which the Reserve Bank of India (RBI) charges on its long-term lendings is known as the bank rate.
· The clients who borrow through this route are the Government of India, state governments, banks, financial institutions, co-operative banks, Non-Banking Financial Companies (NBFCs), etc. The rate has direct impact on long term lending activities of the concerned lending bodies operating in the Indian financial system.
· The rate was realigned with the MSF (Marginal Standing Facility) by RBI in February 2012.
· By March 2018, it was 6.25 per cent.
"Gold Tranche" (Reserve Tranche) refers to
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