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Questions
Define the term Statutory Liquidity Ratio.
What is meant by Statutory Liquidity Ratio?
Solution
Statutory Liquidity Ratio (SLR) is the minimum percentage of deposits that a commercial bank has to maintain in the form of specified liquid assets with themselves.
RELATED QUESTIONS
Define bank rate.
Briefly explain two qualitative methods of credit control adopted by this institution.
The central bank controls credit _____ .
During inflation, the central bank usually:
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Increase in cash reserve ratio adversely affects the capacity of commercial banks to create credit.
Reason (R): An increase in cash reserve ratio reduces the excess reserves of commercial banks and hence limits their credit creating power.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Bank rate is a quantitative instrument of monetary policy.
Reason (R): During inflation, RBI reduces the bank rate.
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Differentiate between quantitative and qualitative methods of credit control.
Who controls the credit supply in an economy?
What are quantitative methods of credit control?
