Question

What is the reason for ineffective bank rate policy in India to control the available credit and its cost?

• A. The Indian money market is underdeveloped
• B. Indigenous bankers are influenced by the bank rate policy
• C. Interest rates charged by commercial banks are automatically linked to the bank rate
• D. None of the above

Answer 1

The correct option is A

The Indian money market is underdeveloped

The bank rate policy in India has not been effective in controlling the availability and cost of credit because the Indian money market is underdeveloped