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Question : Which one of the following is not an instrument of credit control in India?

Option 1: Rationing of credit

Option 2: Direct action

Option 3: Open market operations

Option 4: Variable cost reserve ratios


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Answer (1)
Team Careers360 9th Jan, 2024

Correct Answer: Variable cost reserve ratios


Solution : The correct option is Variable cost reserve ratios.

The objective of the variable reserve ratio (Cash Reserve Ratio), which is a quantitative technique, is to manage just the volume of credit, not the volume and purpose of the credit for which the bank makes loans. For these goals, both the qualitative approach and the selective control method are utilised. It has several drawbacks.

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