Question
In the context of Indian economy; which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’?
- To enable the Central Bank to control the amount of advances the banks can create
- To make the people’s deposits with banks safe and liquid
- To prevent the commercial banks from making excessive profits
- To force the banks to have sufficient vault cash to meet their day-to-day requirements
Answer: Option B
Answer: (b)Because Reserve requirements are designed as “precautionary measures” and not to stop banks from “excessive” profit.
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Answer: (b)Because Reserve requirements are designed as “precautionary measures” and not to stop banks from “excessive” profit.
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