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1 mark

The minimum interest rate of a bank below which it is not viable to lend is known as _______.

  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 scheduled commercial banks are structurally restricted from lending to their customers, ensuring financial viability and consistency across commercial loan assets.

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Try it yourself before checking the explanation above.

The minimum interest rate of a bank below which it is not viable to lend is known as _______.
A
Reserved Rate
B
Base Rate
C
Marginal Rate
D
Prime Lending Rate

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BankingMonetary PolicyInterest Rates

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