Question

Before financial reforms, the banking system was characterised with all of the following except:

• A. Administered interest rates structure
• B. Quantitative restrictions on credit flow
• C. High revenue requirements
• D. Keeping very less lend-able resources for the priority sector

Answer 1

Answer: (D)

Keeping very less lend-able resources for the priority sector

Prior to New Economic Policy !991, a very high lend-able resources were kept for the priority sector. Administered interest rates structure, quantitative restriction on credit flow and high revenue requirements- are other features prevalent in the Indian economy prior to financial reforms of new economic policy.