ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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RBI
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Indian Banking Association
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SEBI
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None of These
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Detailed explanation-1: -The Reserve Bank of India (RBI) controls the supply of money and bank credit.
Detailed explanation-2: -Central banks conduct monetary policy by adjusting the supply of money, usually through buying or selling securities in the open market. Open market operations affect short-term interest rates, which in turn influence longer-term rates and economic activity.
Detailed explanation-3: -It uses Liquidity Adjustment Facility (LAF) – repo rate as one of the significant tools to establish control over money supply. Bank rate is used to prescribe penalty to the bank if it does not maintain the prescribed SLR or CRR.
Detailed explanation-4: -Credit control is a monetary policy tool used by the Reserve Bank of India to control the demand and supply of money, or liquidity, in the economy. The Reserve Bank of India (RBI) supervises the credit granted by commercial banks.