During a period of high inflation, the Reserve Bank of India (RBI) decides to increase the Repo Rate. Which of the following is the most likely direct consequence of this policy action on the commercial banking system?

Options:

• A: Commercial banks will immediately experience an increase in their Statutory Liquidity Ratio (SLR) requirements.
• B: Commercial banks will reduce their marginal cost of funds-based lending rate (MCLR) to attract more borrowers.
• C: The yield on government securities held by commercial banks will decrease immediately.
• D: The cost of short-term borrowing for commercial banks from the RBI increases, leading to a contraction in credit creation.

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