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प्रश्न
State the impact of an increase in Cash Reserve Ratio on loanable funds.
What is the impact of an increase in Cash Reserve Ratio on loanable funds?
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उत्तर
- An increase in the Cash Reserve Ratio (CRR) requires commercial banks to maintain a higher portion of their deposits as reserves with the Reserve Bank of India.
- This reduces the amount of money available to banks for lending, resulting in a fall in total loanable funds.
- As a result, bank's ability to lend to consumers and businesses decreases, thereby slowing economic activity.
संबंधित प्रश्न
Which of the following is a selective/qualitative method of credit control.
Explain how credit rationing helps to control credit in an economy.
______ is a quantitative method of credit control.
Observe the relationship of the first pair of words and complete the second pair.
Quantitative method of credit control by the central bank : Bank rate.
Quantitative method of credit control by the central bank :
Give any two reasons as to why a country needs a central bank.
Define the term Statutory Liquidity Ratio.
The Central Bank is the apex monetary institution of the country. Explain its role of a custodian of foreign exchange reserves.
What do you mean by credit control?
Give an example of margin requirements.
Describe two quantitative credit control measures of the Central Bank.
