ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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FPC hasn’t power to alter loan-to-value ratios
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FPC is charged with safeguarding financial stability
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The FPC can change the cash reserve requirements for Banks
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FPC has the power to alter loan-to-value ratios
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Detailed explanation-1: -The Financial Policy Committee (FPC) was set up after the financial crisis to oversee the stability of the financial system. This box discussed the specific macro-prudential tools the FPC can apply and their potential implications for the economy and our forecasts.
Detailed explanation-2: -Credit committee approval usually determines the terms on which finance is made available, including any security that may be required from the borrower or other obligors.
Detailed explanation-3: -The FPC has a secondary objective to support the economic policy of the Government that is charged with insuring the safety and soundness of the entire financial system.” The FPC has the authority to introduce regulations and guidelines in order to meet its mandate.
Detailed explanation-4: -All Applicable NBFCs shall form a Nomination Committee to ensure ‘fit and proper’ status of proposed/ existing directors. Explanation I : The Nomination Committee constituted under this paragraph shall have the same powers, functions and duties as laid down in Section 178 of the Companies Act, 2013.