How do change in bank rate …
CBSE, JEE, NEET, CUET
Question Bank, Mock Tests, Exam Papers
NCERT Solutions, Sample Papers, Notes, Videos
Posted by Amar Singh 6 years, 11 months ago
- 1 answers
Test
Related Questions
Posted by Nandita Sharma 1 year, 6 months ago
- 1 answers
Posted by Dipika Sharma 1 year, 6 months ago
- 0 answers
Posted by Sakshi Singh 5 months, 3 weeks ago
- 1 answers
Posted by Shruti Singh 1 year, 6 months ago
- 0 answers
Posted by Rijum Karlo 1 year, 6 months ago
- 0 answers
Posted by Naman Jain 1 year, 5 months ago
- 1 answers
Posted by Niyati Garg 1 year, 5 months ago
- 0 answers
Posted by Mehar Ansari 1 year, 6 months ago
- 0 answers
myCBSEguide
Trusted by 1 Crore+ Students
Test Generator
Create papers online. It's FREE.
CUET Mock Tests
75,000+ questions to practice only on myCBSEguide app
Yogita Ingle 6 years, 11 months ago
The rate at which commercial banks can borrow money from RBI, when they run short of reserves, is known as bank rate. When the Central Bank increases the bank rate, it increases the cost of borrowing and hence, discourages the borrowers from taking a loan. Due to this, the process of credit creation and flow of money also reduces.
On the other hand, when the Central Bank decreases the bank rate, it encourages the borrower to take more and more loan. A high demand of loan increases the credit multiplier and credit creation process of the commercial banks.
2Thank You