Option 1 -> Bank Rate is the rate at which the central bank lends to commercial banks, not the difference between deposit and lending rates.
Option 2 -> Spread is the difference between the interest rate paid on deposits and the rate charged on loans.
Option 3 -> Reserve refers to the portion of deposits banks must maintain with the central bank.
Option 4 -> Deposits are funds placed by customers in the bank, not an interest rate difference.
Hence, Spread -> The spread, also known as interest rate spread or net interest margin, is the difference between the interest rate a bank charges borrowers and the interest rate it pays to depositors. This spread represents the bank's primary source of profit from its lending and deposit-taking activities. For example, if a bank pays 3% on deposits and charges 8% on loans, the spread is 5%. -> correct