Question : The commercial banks of India have to maintain a minimum percentage of cash, gold and other securities before lending loans to their customers. This is called the ____________.
Option 1: Capital Adequacy Ratio
Option 2: Current Account and Savings Account Ratio
Option 3: Statutory Liquidity Ratio
Option 4: Cash Reserve Ratio
Correct Answer: Statutory Liquidity Ratio
Solution : The correct option is the Statutory Liquidity Ratio.
The practice of maintaining a minimum percentage of cash, gold and other approved securities as a proportion of their demand and time liabilities is known as the Statutory Liquidity Ratio (SLR). It is a regulatory requirement imposed by the central bank to ensure the liquidity and stability of commercial banks. In India, the current SLR rate is 18%. This means that banks must keep a minimum of 18% of their Net Demand and Time Liabilities (NDTL) in liquid assets.
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Question : The rate at which the Reserve Bank of India lends to other commercial banks for the short term has been reduced. What is this rate called?
Option 1: Cash Reserve Rate
Option 2: Reverse Repo Rate
Option 3: Bank Rate
Option 4: Repo Rate
Question : In India, _____fixes the Cash Reserve Ratio(CRR) for the banks in the economy.
Option 1: Reserve Bank of India
Option 2: Ministry of Finance
Option 3: Ministry of External Affairs
Option 4: State Bank of India
Question : Which of the following statements is correct regarding the bank reserves? I. These reserves are kept partly as cash and partly in the form of financial instruments. II. Cash Reserves Ratio are deposits that commercial banks keep with the Reserve Bank of India.
Option 1: Only II
Option 2: Both I and II
Option 3: Only I
Option 4: Neither I nor II
Question : In India, credit creation is done by:
A) Ministry of Finance
B) Reserve Bank of India
C) Commercial Banks
Option 1: Only C
Option 2: Only B
Option 3: All - A, B and C
Option 4: Only A
Question : Nashik is also known as ______ capital of India.
Option 1: wine
Option 2: gold
Option 3: orange
Option 4: cotton
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