Multiple choice

Which of the following is correct in relation to banks in the post reform period?

  1. Bank rate has been increased to 10 per cent.

  2. CRR has been increased to 8 per cent.

  3. CRR has been reduced in stages.

  4. Public sector banks have been asked to raise their funds from their private resources only.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In the post-reform period (after 1991), the CRR (Cash Reserve Ratio) has been reduced in stages by the RBI as part of financial liberalization and to increase lendable resources for banks. This was done to improve monetary policy flexibility and banking sector efficiency. Option A is incorrect as bank rate hasn't been fixed at 10%. Option B is incorrect as CRR has been reduced, not increased to 8%. Option D is incorrect as banks can raise funds from multiple sources, not just private resources.

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