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    Question

    What is the interest rate earned by banks for their

    contribution to RIDF and other funds if their PSL shortfall is 8% below the target?
    A Bank Rate minus 1% Correct Answer Incorrect Answer
    B Bank Rate minus 2% Correct Answer Incorrect Answer
    C Bank Rate minus 3% Correct Answer Incorrect Answer
    D Bank Rate minus 4% Correct Answer Incorrect Answer
    E Bank Rate minus 5% Correct Answer Incorrect Answer

    Solution

    Banks earn interest when they deposit money (shortfall) into RIDF or similar funds. Interest rates depend on how much shortfall they have:  

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