Question : The reserve held by Commercial Banks over and above the statutory minimum with the RBI are called:
Option 1: Cash reserve
Option 2: Deposits reserves
Option 3: excess reserves
Option 4: momentary reserves
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Correct Answer: excess reserves
Solution : The correct option is excess reserve.
Reserves held by Commercial Banks in excess of the statutory minimum needed by the Reserve Bank of India (RBI) are referred to as "excess reserves" or "surplus reserves." Banks may choose to hold these money in addition to the required reserves established by the central bank. Banks may use this additional liquidity for a variety of things, including lending to other banks that require reserves or making investments.
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Question : The rate at which RBI gives short-term loans to commercial banks is called:
Option 1: repo rate
Option 2: reverse repo rate
Option 3: bank rate
Option 4: cash reserve rate
Question : Under the Statutory liquidity ratio, commercial banks are required to keep a fraction of ____ in the form of liquid assets.
Option 1: current deposits
Option 2: total demand and term deposits
Option 3: term deposits
Option 4: saving deposits
Question : Which of the following sponsors Regional Rural Banks (RRBs)?
Option 1: RBI
Option 2: Foreign banks
Option 3: National commercial banks
Option 4: Co-operative banks
Question : Banks are required to keep some reserves in liquid form with themselves. This is called ______.
Option 1: marginal stability scheme
Option 2: statutory liquidity ratio
Option 3: open market operations
Option 4: legal deposit ratio
Question : Rate of interest is determined by
Option 1: The rate of return on the capital invested
Option 2: Central Government
Option 3: Liquidity preference
Option 4: Commercial Banks
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