BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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

Which of the following instruments of credit control adopted by Reserve Bank of India does not fall within ‘general’ or ‘quantitative’ methods of credit control?

A	Stipulation of certain minimum margin in respect of advance against specified commodities
B	Open market operations
C	Bank rate
D	Variable reserve requirements

Explanation:

Detailed explanation-1: -Bank rate, Statutory Cash Reserve Requirement, Statutory Liquidity Ratio are the instruments of quantitative credit control. Moral Suasion is not quantitative credit control instrument of credit control.

Detailed explanation-2: -Margin requirements is not a quantitative credit control tool of RBI.

Detailed explanation-3: -The different instruments of credit control used by the Reserve Bank of India are Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), the Bank Rate Policy, Selective Credit Control (SCC), Open Market Operations (OMOs).

Detailed explanation-4: -The quantitative measures of credit control are Bank Rate Policy: The bank rate is the Official interest rate at which RBI rediscounts the approved bills held by commercial banks. For controlling the credit, inflation and money supply, RBI will increase the Bank Rate.

Detailed explanation-5: -Out of the given options, managed floating is not an instrument of credit control.

There is 1 question to complete.