Which one of the following measures is not adopted by Reserve Bank of India for controlling credit ?
Comparing the four ratios in relation to Reserve Bank of India (RBI) policy: - Cash Reserve Ratio (CRR, ) and Statutory Liquidity Ratio (SLR, ) are statutory quantitative…
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Which one of the following measures is not adopted by Reserve Bank of India for controlling credit ?
Answer and explanation
Correct answer D
Comparing the four ratios in relation to Reserve Bank of India (RBI) policy: - Cash Reserve Ratio (CRR, ) and Statutory Liquidity Ratio (SLR, ) are statutory quantitative credit-control instruments directly set by the RBI. - Capital Adequacy Ratio (CAR / CRAR, ) is a prudential regulatory requirement prescribed by the RBI for commercial banks (requiring banks to maintain capital as a percentage of risk-weighted credit exposures). - Cash Deposit Ratio is a behavioral ratio reflecting how much cash the public or banks hold relative to deposits; it is NOT a policy measure set or adopted by the RBI to control credit. Therefore, (Cash deposit ratio) is the correct answer.
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UGC NET Economics