Advertisements
Advertisements
प्रश्न
Briefly explain how Cash Reserve Ratio can be used to control credit.
उत्तर
The portion of a commercial bank's total deposits that it must hold with the reserve bank in the form of cash reserves is referred to as the CRR. As a result, all scheduled banks are obligated to keep a set percentage of their total deposits with the reserve bank (determined by the reserve bank's CRR). By altering this reserve ratio, the reserve bank hopes to affect commercial banks' credit creation power and so regulate the country's credit ratio. Credit contraction occurs when the CRR is raised, while credit growth occurs when the CRR is reduced.
APPEARS IN
संबंधित प्रश्न
______ is a revolving credit arrangement.
______ deposits earn very low rate of interest on it.
With reference to the secondary functions of a Commercial Bank, explain the general utility function.
Explain the features of savings bank account.
Identify the agency functions of the commercial banks from the following:
Explain any two Lending Money functions of Commercial Banks.
Commercial banks accept deposits, lend money and provide other services.
What are the two main functions of a commercial bank?
What is meant by Discounting of a Bill of Exchange?
How is discounting of a bill of exchange a form of bank lending?
