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Ans – (b) Explanation:- In the absence of the circulation of any other currency in the economy. It means bank money such as demand deposits also does not exist. In this case, LRR also does not exist. Thus as per…

Ans – (d) Explanation:- All denominations of coins and one rupee note is issued by the Ministry of finance of the government of India. One rupee note bears the signature of finance secretary.

Ans – (a) Explanation:- Cash Reserve Ratio (CRR): It refers to the minimum percentage of net demand and time liabilities, to be kept by commercial banks with the central bank. A change in CRR affects the ability of commercial banks…

Ans – (d) Explanation:- The name of the central bank in India is the Reserve Bank of India. It does not interact directly with the general public. It is the apex body in the financial sector. It frames the rules…

Ans – (c) Explanation:- There are three types of deposit accounts opened by commercial banks 1. Savings Account 2. Current Account 3. Time Deposits The money in the time deposits is fixed for a certain period of time. Account holders…

Ans – (a) Explanation:- (a) RBI acts as a banker to the Central Government as well as State Governments (b) The Central Bank does not create credit, it’s the commercial bank that creates credit in the economy. (c) All financial…

Ans – (b) Initial deposits made by people are termed as Primary Deposits. Explanation:- Initial deposits are the money in cash deposited by the general public in commercial banks in different types of accounts. It is also called Primary deposits.…

Ans – (b) Explanation:- Margin Requirements:- Margin is the difference between the amount of the loan and the market value of the security offered by the borrower against the loan. If the margin fixed by the Central Bank is 40%,…

Ans – (c) Explanation:- Demand Deposits are the deposits of the general public with the commercial bank. The commercial bank issues the cheques against the demand deposits to the account holders. The account holders can withdraw cash by issuing cheques.…

Ans – (c) Explanation:- Both Statutory Liquidity Ratio and Cash Reserve Ratio are fixed by the Reserve Bank of India. Both are the tools of Monetary policy to control the money supply in the country. The RBI is the apex…