Question : If the Reserve Bank of India reduces the cash reserve ratio(CRR), what will be its effect on credit creation?
Option 1: Increase in the credit
Option 2: Decrease credit creation
Option 3: Have no impact on credit creation
Option 4: Have no definite impact on credit creation
Correct Answer: Increase in the credit
Solution : The correct answer is an increase in the credit.
When the Reserve Bank of India (RBI) reduces the Cash Reserve Ratio (CRR), the economy's credit availability strengthens. This is because the CRR represents the amount of deposits that banks are required to retain as reserves with the central bank. When the CRR is reduced, banks are compelled to keep a smaller proportion of their deposits as reserves, releasing more funds for investment and lending. As a result, banks can increase their lending activity, making more credit available to businesses and individuals.
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Question : Which of the following was established on the recommendation of the Hilton Young Commission?
Option 1: The Securities and Exchange Board of India (SEBI)
Option 2: The Reserve Bank of India
Option 3: State Bank of India
Option 4: National Bank for Agriculture and Rural Development
Question : Reserve Bank of India was nationalised in:
Option 1: 1947
Option 2: 1948
Option 3: 1949
Option 4: 1951
Question : The monetary policy is India is formulated by:
Option 1: central government
Option 2: industrial financial corporation of India
Option 3: Reserve Bank of India
Option 4: Industrial Development Bank of India
Question : State Bank of India was previously known as:
Option 1: Imperial Bank of India
Option 2: Canara Bank
Option 3: Syndicate Bank
Option 4: Co- operative
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