Question

The RBI uses various quantitative and qualitative credit control measure. Which among the following are the quantitative measures?

Code:

• A. 1, 2, 3 and 5 only
• B. 1,2 and 3 only
• C. 1, 2, 3 and 4
• D. All of these

Answer 1

The correct option is A

1, 2, 3 and 5 only

There are measures that impact the total quantum of credit provided by commercial banks. These are Bank rate, OMOs, CRR, SLR and Repo/Reverse Repo Rate. Margin requirement refers to difference between the securities offered and amount borrowed by Banks which is a qualitative measure hence not correct option.

Marginal Standing Facility (MSF):-Is a short term liquidity management tool used by RBI. Under this facility all scheduled commercial banks can borrow overnight from RBI up to 1% of their net demand and time liabilities.