BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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For which of the following reasons RBI has decided to undertake mid-quarter policy reviews? [Allahabad Bank 2011]
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Only 1
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Only 2
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Only 3
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All the above
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Explanation:
Detailed explanation-1: -An increase in the Reverse Repo Rate provides an incentive to the banks to park their surplus funds with the central bank on a short-term basis, thereby reducing liquidity in the banking system and overall economy.
Detailed explanation-2: -“…the primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.”
Detailed explanation-3: -The correct answer is price stability. Key Points Monetary Policy: Monetary policy refers to the policy of the central bank with regard to the use of monetary instruments under its control to achieve the goals specified in the Act.
There is 1 question to complete.