The Reserve Bank of India on 1 April 2014 adopted the Consumer Price Index (CPI) as the key measure of Inflation. It was adopted in the first bi-monthly monetary policy statement for 2014-1 5. It was adopted on the basis of recommendations of which Committee report?

BANKING GENERAL KNOWLEDGE

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

A	Urjit R Patel Committee
B	A Ghosh Committee
C	C Rao Committee
D	Bhagwati Committee

Explanation:

Detailed explanation-1: -It was adopted on the basis of the recommendations of the report of the Urjit R Patel Committee on the revision and strengthening of the monetary policy system.

Detailed explanation-2: -Repo rate refers to the rate at which commercial banks borrow money by selling their securities to the Central Bank of our country i.e. Reserve Bank of India (RBI) to maintain liquidity, in case of shortage of funds or due to some statutory measures. It is one of the main tools of RBI to keep inflation under control.

Detailed explanation-3: -However, presently RBI does not entirely control money supply via the bank rate. It uses Liquidity Adjustment Facility (LAF) – repo rateas one of the significant tools to establish control over money supply.

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