BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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reduces the bank rate
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raises the bank rate
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permits the bank rate to be decided by market forces
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All of the above
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Detailed explanation-1: -Purchasing power of individual will increase, in result demand for the goods will increase, supply will meet the demand.
Detailed explanation-2: -In the Indian economy, the RBI’s role in credit control is crucial. The Reserve Bank of India controls the flow of credit in our economy in order to keep inflation and economic growth in check. Credit changes can cause market instability, so credit control policies must be carefully planned before being implemented.
Detailed explanation-3: -Section 24 in BANKING REGULATION ACT, 1949.
Detailed explanation-4: -It is the duty of the RBI to control the credit through the CRR, repo rate, and open market operations. As the bankers’ bank, the RBI facilitates the clearing of cheques between the commercial banks and helps the inter-bank transfer of funds. It can grant financial accommodation to schedule banks.