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Ans – (c) Explanation:- Bank Rate:- The bank rate is the rate at which the central bank of a country lends money to commercial banks to meet their long-term needs. RBI uses bank rate to control credit and it has…
Ans – (d) Explanation:- (a) Bank rate is the rate at which the Central Bank is ready to give credit to Commercial banks for long-term needs. (b) Bank rate is the interest rate at which the central bank provides loans…
Ans – (d) Explanation:- Commercial banks open following types of accounts 1. Savings Deposits Account 2. Current Deposits Account 3. Time Deposits Account
Ans – (c) Explanation:- Quantitative Credit Control Policy: 1. Reverse Repo Rate 2. Cash Reserve Ratio 3. Open Market Operations Qualitative Credit Control Policy: 1. Margin Requirements
Ans – (a) Explanation:- Demand deposits are chequable deposits as money can be withdrawn by issuing cheques on demand. The commercial bank issues a book of cheques. The account holder can withdraw cash by issuing a self cheque. The holder…
Ans – (c) Commercial Banks create money by way of demand deposits. Explanation:- Generally, commercial banks create money through lending that is credited in the demand deposits. The commercial bank provides loans to the public from initial deposits. Banks do…
Ans – (a) Explanation:- The credit multiplier is inversely related to the legal reserve ratio. In other words, credit Multiplier is the process by which commercial banks create credit, based upon the reserve ratio and initial deposits. It is calculated…
Ans – (b) Explanation:- Qualitative instruments of monetary policy include: 1. Margin Requirements 2. Moral Suasion 3. Selective Credit Controls Additional Information:- Moral Suasion:- This is a combination of persuasion and pressure that the Central bank applies on other banks…
Ans – (c) Monetary Policy is the policy of the Central Bank. Explanation:- The Reserve Bank of India (RBI) is empowered to regulate the money supply in the economy through its ‘Monetary Policy’. It is the policy adopted by the…
Ans – (a) The bank rate is the rate at which the Central Bank lends money to Commercial Banks Explanation:- Bank Rate:- It is the interest rate at which the commercial banks can borrow from the central bank to meet…