2020
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rs 5.74 lakh crore
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Rs 8.74 lakh crore
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Rs 13.74 lakh crore
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Rs 3.74 lakh crore
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Detailed explanation-1: -The Reserve Bank of India (RBI), under its Liquidity Adjustment Facility, infuses liquidity in the banking system via repos and sucks it out using reverse repos. The RBI, after assessing liquidity conditions, uses a 14-day variable rate repo and/or reverse repo operation. The quantum is decided by the RBI.
Detailed explanation-2: -The Government of India’s cash balances at the time of the partition were a little under Rs. 400 crores, inclusive of the securities held in the Cash Balance Investment Account. Of these, Pakistan’s share was fixed at Rs. 75 crores; this was inclusive of Rs.
Detailed explanation-3: -When RBI wants to reduce liquidity in the banking system, it increases the CRR as it reduces the money supply in the economy.