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प्रश्न
Which of the following statements are correct and which are incorrect? Give reasons.
- Central bank is a currency authority.
- Bank rate is a qualitative method of credit control.
- Quantitative methods regulate direction of credit.
- Bank rate is the rate at which commercial banks give loans to the public.
- Central bank should sell government securities when credit is to be expanded.
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उत्तर
- Correct
Reason: The central bank is the authority in charge of issuing currency in the country. It regulates the money supply and ensures that the currency remains stable. - Incorrect
Reason: Bank rates are a quantitative form of credit control. It refers to the interest rate at which the central bank lends to commercial banks, which influences the total money supply. - Incorrect
Reason: Quantitative methods control the volume of credit, not the direction. Margin limitations and selective credit control are two qualitative approaches for directing credit to particular sectors. - Incorrect
Reason: The bank rate refers to the rate at which the central bank lends to commercial banks rather than the general population. Commercial banks utilise this rate to determine their lending rates. - Incorrect
Reason: The central bank sells government securities to limit the economy's credit and liquidity. The central bank often purchases government assets to expand credit, pushing funds into the financial sector.
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संबंधित प्रश्न
Briefly explain two qualitative methods of credit control adopted by this institution.
The difference between the value of security and the amount of loan sanctioned against these securities is known as:
The central bank controls credit _____ .
______ is a quantitative method of credit control.
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | A rate of interest at which the central bank (RBI) lends money to member commercial banks to meet they long term needs. | A. | Cash Reserve Ratio |
| (ii) | A rate of interest at which RBI lends money to commercial banks to meet their short term needs. | B. | Statutory liquidity ratio |
| (iii) | A minimum percentage of total deposits kept by banks with the Central Bank. | C. | Repo rate |
| (iv) | A minimum percentage of total deposits to be kept by banks inform of liquid assets with themselves. | D. | Bank rate |
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.
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Identify the following Credit Control measures undertaken by the Central Bank during inflation.
The Central Bank increases the rate at which it lends to the Commercial Bank.
Give an example of margin requirements.
