Discussion
Which of the following rates are reviewed by the RBI at the time of periodical review of the policy?
1. Bank rate
2. Repo rate
3, Savings bank rate
Answer: D
Correct answer: Both 1 and 2
The bank rate and the repo rate are both policy rates set by the Reserve Bank and reviewed at each monetary policy meeting.
The savings bank deposit rate is not. It was deregulated in October 2011, since when each bank sets its own rate, and the RBI neither fixes nor reviews it. The deregulation was deliberate: administered deposit rates blunted competition between banks for retail deposits, and freeing them was expected to reward the banks offering savers better terms.
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