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Bank of issue means a bank that has the legal right to issue currency notes. Additional Information:- ‘Bank of issue’ means a bank which has the legal right to issue currency notes. Most of the central banks today enjoy complete…
The central bank has the sole monopoly in note issue, whereas, this power is not enjoyed by a commercial bank. All currency (except one rupee note and coins) are issued by the central bank in India. But Commercial Bank can…
The Central Bank is an ‘Apex’ body that controls, operates, regulates, and directs the entire banking and monetary structure of the country. It is the supreme body as it occupies the topmost position in the monetary and banking system of…
LIC is not a bank as it does not accept chequeable deposits from the public although if performs the function of lending money. Additional Information: However, LIC is a financial institution, But not a bank. For a financial institution to…
Two essential conditions to become a bank are: 1. Accepting deposits 2. Advancing of loans In deposits, a commercial bank must accept the demand deposits i.e. current account and savings accounts Additional information:- A Commercial Bank is an institution that…
Ans – (c) Explanation:- Statement 1 and 2 are true as the Reserve Bank of India keeps a certain percentage of deposits of commercial banks as reserve in the form of CRR to avoid to much lending to the public.…
Ans – (c) Explanation:- Statement 1 is true. All the coins are issued by the Finance Ministry of India. Statement 2 is false as one rupee note is not issued by the Reserve Bank of India. it is issued by…
Ans – (b) Explanation:- Statement 1 is false, CRR and SLR are not the same and one thing. Cash Reserve Ratio (CRR):- It refers to the minimum percentage of net demand and time liabilities, to be kept by commercial banks…
Ans – (c) Explanation:- Statement 1 is true. The value of the money multiplier is determined by the reserve ratio prevailing in the monetary system. Statement 2 is false as it is inversely related to the LRR. Money Multiplier =…
Ans – (a) Explanation:- Statement 1 is correct as the statutory liquidity ratio is one of the tools of the monetary policy to control the credit creation. the monetary policy is determined by the Reserve Bank of India. Statement 2…