Question Statement:
Since the last one year, after a 125 basis point reduction in repo rate by the Reserve Bank
of India, banking institutions have been making a demand to reduce interest rates on small
saving schemes. Finally, the government announced yesterday a reduction in interest rates
on small saving schemes to bring them on par with fixed deposit interest rates.
Which one of the following statements can be inferred from the given passage?
Options:
- (A) Whenever the Reserve Bank of India reduces the repo rate, the interest rates on small saving schemes are also reduced
- (B) Interest rates on small saving schemes are always maintained on par with fixed deposit interest rates
- (C) The government sometimes takes into consideration the demands of banking institutions before reducing the interest rates on small saving schemes
- (D) A reduction in interest rates on small saving schemes follow only after a reduction in repo rate by the Reserve Bank of India