Archives Answers

Ans – (a) Explanation:- The central bank is an apex body that controls, operates, regulates, and directs the entire banking and monetary structure of the country. It is generally owned and governed by the government. It operates in the public…

Ans – (c) 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:- Open Market Operations:- Open market operations (OMO) refer to the buying and selling of government securities by the Central Bank from/to the public and commercial banks. RBI is authorised to sell or purchase treasury bills and…

Ans – (a) Explanation:- A commercial bank is an institution that performs the functions of accepting deposits, granting loans, and making investments, to earn profits. The functions performed by commercial banks can be broadly categorised under two heads. (i) Primary…

tAns: (b) Function of Commercial Bank – (ii) Credit Creation Explanation:- One of the function of commercial bank is the credit creation. It offers loans to the public from the deposits to the public. The loan amount is deposited into…

Ans: (i) – b (ii) – a (iii) – d (iv) – c Explanation:- (i) – b Repo Rate is the rate of interest at which RBI provides short-term credit to commercial banks. (ii) – a Reverse Repo Rate is…

Ans: (i) – c (ii) – d (iii) – a (iv) – b Explanation:- (i) – c Bank rate is also called Discount Rate. (ii) – d Money Multiplier is also called Deposit Multiplier. (iii) – a Open Market operations…

Ans: (i) – c (ii) – d (iii) – a (iv) – b Explanation:- (i) – c The Central Bank is called the Reserve Bank of India in India. (ii) – d Bank of issue is one of the functions…

Ans: (i) – b (ii) – a Explanation:- According to Legal reserve requirements, commercial banks are obliged to maintain reserves. It is a very quick and direct method for controlling the credit-creating power of commercial banks. Commercial Bank is required…

Repo Rate:- The rate at which the RBI (Central Bank) offers short-period loans to commercial banks by buying government securities in the open market. In fact, the Repo rate is the Repurchase Rate. A repurchase agreement is signed by both…