Advertisements
Advertisements
Question
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 |
Options
(i) C, (ii) B, (iii) D, (iv) A
(i) D, (ii) C, (iii) A, (iv) B
(i) C, (ii) D, (iii) B, (iv) A
(i) B, (ii) A, (iii) C, (iv) D
Advertisements
Solution
(i) D, (ii) C, (iii) A, (iv) B
Explanation:
| 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 |
APPEARS IN
RELATED QUESTIONS
Define qualitative credit control policy of the RBI.
______ is a quantitative method of credit control.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Increase in cash reserve ratio adversely affects the capacity of commercial banks to create credit.
Reason (R): An increase in cash reserve ratio reduces the excess reserves of commercial banks and hence limits their credit creating power.
Define the term Statutory Liquidity Ratio.
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Differentiate between quantitative and qualitative methods of credit control.
Define the following term:
Margin Requirements.
Briefly explain the following credit control method adopted by the Central Bank.
Publicity
What do you mean by credit control?
Describe two quantitative credit control measures of the Central Bank.
