BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The recent decisionZ of the RBI to cut Cash Resereve Ratio (CRR) by 150 basis points (October 2008) will be able to infuse how much liquidity into the market?
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Rs. 10, 000 crores
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Rs. 30, 000 crores
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Rs. 40, 000 crores
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Rs. 50, 000 crores
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Explanation:
Detailed explanation-1: -The correct answer is Scheduled commercial banks will cut their lending rates. Should the RBI reduce the statutory liquidity ratio by 50 basis points, then Scheduled commercial banks will cut their lending rates.
Detailed explanation-2: -When CRR is reduced, more funds are available to banks for deploying in other businesses because they need to keep fewer amounts with RBI. This means that the banks would have more money to play and this leads to a reduction of interest rates on loans provided by the Banks and it increases lendable resources.
Detailed explanation-3: -Latest Updates 4th May 2022 – Reserve Bank of India (RBI) raised cash reserve ratio (CRR) by 50 basis points to 4.50% effectvie May 21.
There is 1 question to complete.