BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Purchase and sale of the Government Securities by RBI
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Rationing of the credit allocated by commercial banks by RBI
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Request by the RBI to the commercial banks to take certain measures
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None of the above
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Detailed explanation-1: -Open market operations refer to the selling and purchasing of the treasury bills and government securities by the central bank of any country in order to regulate money supply in the economy. It is one of the most important ways of monetary control that is exercised by the central banks.
Detailed explanation-2: -What is open market operations by RBI? Open Market Operations is the simultaneous sale and purchase of government securities and treasury bills by RBI. The objective of OMO is to regulate the money supply in the economy. RBI carries out the OMO through commercial banks and does not directly deal with the public.
Detailed explanation-3: -Open Market Operations refers to the buying and selling of Government securities in the open market. This purchase and sale are entrusted to the Central bank (RBI) on behalf of the Government.
Detailed explanation-4: -Open Market Operations means sale and purchase of bonds and securities to the commercial banks by the RBI.
Detailed explanation-5: -Open market operations (OMOs)–the purchase and sale of securities in the open market by a central bank–are a key tool used by the Federal Reserve in the implementation of monetary policy. The short-term objective for open market operations is specified by the Federal Open Market Committee (FOMC).