Consider the following statements about monetary policy of RBI and select the incorrect one ........

Economic Affairs Money Supply and Monetary Policy

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Consider the following statements about monetary policy of RBI and select the incorrect one.

The sum under CRR cannot be lend by banks

Reverse repo rate is the interest rate paid by RBI to its client for short term loans.

Open Market Operations (OMO) are performed by RBI

Bank Rate is the lending rate at which RBI gives loan to Banks and corporate sector

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Explanation:

First statement is correct. CRR is a cash reserve ratio and SLR is statutory liquidity ratio. Under CRR a certain percentage of the total bank deposits have to be kept in the current account with RBI which means banks do not have access to that much amount for any economic activity or commercial activity. Banks can't lend the money.
Second statement is incorrect. Reverse repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) borrows money from commercial banks within the country. It is a monetary policy instrument which can be used to control the money supply in the country.
Third option is correct. An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks.
Fourth option is incorrect. The Bank rate in India is determined by the Reserve Bank of India (RBI). It is the rate at which RBI makes loans to commercial banks with no collateral.