Read the two statements and choose the correct option.

I. The repo rate is normally higher than the reverse repo rate.

II. The repo rate is the rate at which banks lend to the RBI.

Explanation

1. 01

   The RBI lends at a higher rate than it pays when it borrows. I is true.

2. 02

   Banks lending to the RBI is the reverse repo; the repo is the RBI lending to banks. II is false.