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Foreign Exchange and Exchange Rate

Consider the ...

Question

Consider the following statements:
1) In India , the Cash Reserve Requirement is between 3 to $15 %$ of the total demand and time deposits of the commercial banks.
2) In India , the Statutory Liquidity Requirement is not less than $25 %$ of the total demand and time deposits of commercial banks.
Which of the statements given above is/are correct about the General Credit Control measures used by the RBI?

A

Only 1

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B

Only 2

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C

Both 1 and 2

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D

Neither 1 nor 2

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Solution

The correct option is C Both 1 and 2
In current times, the CRR in India remains around 4% of the total demand and time deposits while the SLR remains around 20% of the total demand and time deposits. These values may fluctuate depending upon the periodic monetary policy reviews of the RBI.

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