BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the moral duty of a borrower to deal with only one bank
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the banker’s duty of secrecy as regards the affairs and accounts of his customers
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the advice was given by Reserve Bank to banks/financial institutions in the matter of their lending land other operations with the objective that they might implement or follow it
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All of the above
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Detailed explanation-1: -Moral suasion is a qualitative method of credit control, being used by the central bank. Under this method, the Central Bank merely uses its moral influence on the commercial banks. It includes the advice, suggestion request and persuasion with the commercial banks to co-operate with the Central Bank.
Detailed explanation-2: -Moral suasion is the act of persuading a person or group to act in a certain way through rhetorical appeals, persuasion, or implicit and explicit threats-as opposed to the use of outright coercion or physical force. In economics, it is sometimes used in reference to central banks.
Detailed explanation-3: -Moral suasion is a request by the RBI to the commercial banks to take specific measures as per the economy’s trends. For instance, RBI may direct banks not to give out certain loans. It includes psychological means and informal means of selective credit control.
Detailed explanation-4: -There are several direct and indirect instruments that are used for implementing monetary policy. Repo Rate: The interest rate at which the Reserve Bank provides liquidity under the liquidity adjustment facility (LAF) to all LAF participants against the collateral of government and other approved securities.
Detailed explanation-5: -The monetary policy is a policy formulated by the central bank, i.e., RBI (Reserve Bank of India) and relates to the monetary matters of the country. The policy involves measures taken to regulate the supply of money, availability, and cost of credit in the economy.