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  1. Whenever the Reserve Bank of India reduces the repo rate, the interest rates on small saving schemes are also reduced.
  2. Interest rates on small saving schemes are always maintained on par with fixed deposit interest rates.
  3. The government sometimes takes into consideration the demands of banking institutions before reducing the interest rates on small saving schemes.

  4. A reduction in interest rates on small saving schemes follows only after a reduction in repo rate by the Reserve Bank of India.

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1 Answers

Option 3 : The government sometimes takes into consideration the demands of banking institutions before reducing the interest rates on small saving schemes.

The correct answer is 'The government sometimes takes into consideration the demands of banking institutions before reducing the interest rates on small saving schemes.'

  • Option 1 is incorrect as the statement says that the banking institutions had been demanding the reduction 'since the last one year' before it was fulfilled, implying that it is not something that happens usually. Hence, it cannot be said that whenever the Reserve Bank of India reduces the repo rate, the interest rates on small saving schemes are also reduced.
  • Option 2 is incorrect. The phrase 'to bring them on par with fixed deposit interest rates' in the statement implies that the interest rates on small saving schemes are not always maintained on par with fixed deposit interest rates.
  • Option 4 is incorrect as there is no information provided in the statement to support this inference. 
  • Option 3 is the correct answer.
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