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The minimum interest rate of a bank below which it is not allowed to lend money is called the _______.

  1. A
    Reserved Rate
  2. B
    Base Rate
  3. C
    Marginal Rate
  4. D
    Prime Lending Rate

Solution & Step-by-step Explanation

The Base Rate is the minimum interest rate below which a commercial bank cannot lend to its customers, except in cases allowed by the RBI. It was introduced to enhance transparency in the credit market.

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The minimum interest rate of a bank below which it is not allowed to lend money is called the _______.
A
Reserved Rate
B
Base Rate
C
Marginal Rate
D
Prime Lending Rate

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BankingInterest RatesMonetary System

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