Q: Which one of the following is not correct about Repo rate?
(a)It is the interest rate charged by the Central Bank on overnight loan.
(b)It is the interest rate paid by the commercial banks on overnight borrowing.
(c)It is the interest rate agreed upon in the loan contract between a commercial bank and the Central Bank.
(d)It is the cost of collateral security.
Correct Answer: (d)
The correct answer is (a) 'It is the interest rate charged by the Central Bank on overnight loan.'. This question from the Indian Economy domain tests knowledge of Banking & Financial Sector.