Question

The RBI Implements Monetary policy through which of the following instruments?

Code:

• A. 1, 2 and 3 only
• B. 1, 2 and 4 only
• C. 2 and 3 only
• D. All of these

Answer 1

The correct option is D

All of these

In India the legal framework of RBI’s control over the credit structure has been provided under the ‘Reserve Bank of India Act. 1934 and Banking Regulation Act 1949. Like any other central bank the RBI use following measures of monetary policy for the credit control:

• Bank Rate manipulation. (Bank Rate)
• Open market operations. (Repo / Reserve Repo)
• Reserve requirement change (CRR/SLR)
• Rationing of credit (Priority Sector Lending)
• Moral suasion
• Direct Action.

Therefore all the mentioned options are correct.