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Qualitative Instruments

Which of the ...

Question

Which of the following is/are the selective credit control measures of RBI?
1) Cash Reserve Ratio
2) Statutory Liquidity Ratio
3) Margin requirements
4) Moral suasion
Choose the correct answer using the codes given below.

A

1 and 2

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B

3 and 4

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C

Only 4

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D

All of these

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Solution

The correct option is B 3 and 4
There are two different types of credit control measures used by RBI : Quantitative and Qualitative.
Quantitative measures are used to regulate the volume of credit and these include Open Market Operations, SLR, CRR etc.
Qualitative or selective credit control measures are used to regulate the flow of credit. These include Margin Requirements, Consumer Credit Regulation, Rationing of credit, Moral Suasion etc.

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Similar questions

Q. 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?

Q. Distinguish between:

1. Central Bank and Commercial Bank
2. Quantitative Credit Control Measures and Qualitative Credit Control Measures
3. Bank Rate and Open Market Operations
4. Cash Reserve Ratio and Statutory Liquidity Ratio

Q. 89. Which of the following statements is correct about the Systemically Important Banks?
1. Systemically important banks are perceived as banks that are ‘Too Big To Fail (TBTF)’
2. The International Monetary Fund (IMF) publishes the list of Global Systemically Important banks (G-SIBs).
3. RBI identifies the Domestic Systemically Important Banks (D-SIBs).
4. SIBs are required to maintain additional Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
Select the correct answer using the codes given below:

To reduce the liquidity in the market, RBI can perform which of the following operations?

i. Increase policy rate
ii. Increase cash reserve requirements
iii. Increase the statutory liquidity ratio

Q. Qualitative credit control by a Central Bank exercised by which of the following measure ?
1.Credit rationing
2. Consumers credit regulation
3. Changes in margin requirement on security loans.
Select the correct answer using the codes given below:

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