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Question
Which of these banks formulates the credit control tools?
Options
Canara bank
Industrial Development Bank of India
State Bank of India
Reserve Bank of India
Solution
Reserve Bank of India
Explanation:
The Reserve Bank of India (RBI) is the country's central bank, responsible for creating and carrying out monetary policy, including credit control instruments.
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RELATED QUESTIONS
______ is the main source of money supply in an economy.
The creation of ______ is called credit creation.
''The process of credit creation by commercial banks comes to an end when the total of required reserves become equal to the initial deposits."
With the help of a numerical example, prove that the given statement is true.
Match the following:
| Column I | Column II | ||
| A. | Primary deposits | (i) | Payable on demand |
| B. | Derivative deposits | (ii) | Deposits for a fixed period of time |
| C. | Demand deposits | (iii) | Cash deposits of people |
| D. | Term deposits | (iv) | Deposits created by banks (or loan deposits) |
What is meant by credit creation?
State the advantage of a credit card over currency notes.
What is meant by primary deposits?
What are secondary (derivative) deposits?
How money multiplier is related to Legal Reserve Ratio?
Why are the banks required to keep only a fraction of deposits as cash reserves?
