BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

For the performance of its duties as the regulator of credit, the Reserve Bank of India possesses the usual instruments of general credit control, viz-?

A	bank rate
B	open market operation
C	the power to vary the reserve requirement of banks
D	All of the above

Explanation:

Detailed explanation-1: -The different instruments of credit control used by the Reserve Bank of India are Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), the Bank Rate Policy, Selective Credit Control (SCC), Open Market Operations (OMOs).

Detailed explanation-2: -Regulator and supervisor of the financial system: Prescribes broad parameters of banking operations within which the country’s banking and financial system functions. Objective: maintain public confidence in the system, protect depositors’ interest and provide cost-effective banking services to the public.

Detailed explanation-3: -Section 36 mentions the powers of RBI. The Reserve Bank may prohibit banking companies from entering into a particular transaction and can advise the banking company. It can also assist the banking company by granting loans or advances under Section 18.

There is 1 question to complete.