Tools of monetary policy to PSL

Question 1

1) The 3 motives for preference for liquidity?

Answer 1

N.A

Question 2

2) How current account works? The 3 Os?

Answer 2

N.A

Question 3

3) What is the one asset of any bank?

Answer 3

N.A

Question 4

4) What are the 3 time liabilities of a bank?

Answer 4

N.A

Question 5

5) Current Account, Savings account, Demand drafts are obviously demand liabilities. What are the other 2 less obvious demand liabilities?

Answer 5

N.A

Question 6

6) What is Narrow money?

Answer 6

N.A

Question 7

7) What is broad money?

Answer 7

N.A

Question 8

8) What is aggregate money?

Answer 8

N.A

Question 9

9) What is difference between G-secs and T-bills?

Answer 9

N.A

Question 10

10) The 3 agencies that buy G-secs and T-bills?

Answer 10

N.A

Question 11

11) If buyers are not found for Government Securities, who buys them?

Answer 11

N.A

Question 12

12) Who circulates the coins and 1Rs Notes issued by Government

Answer 12

N.A

Question 13

13) Why is M1-M4 greater than M0?

Answer 13

N.A

Question 14

14) What is the liability of RBI In one line?

Answer 14

N.A

Question 15

15) What is both a liability and an asset for RBI?

Answer 15

N.A

Question 16

16) Apart from Rupee coins, what are the 3 assets of the issue department of RBI?. Hint:- CBS

Answer 16

N.A

Question 17

17) What is the one rule that RBI must follow while issuing currency?

Answer 17

N.A

Question 18

18) Are repo deposits an asset or a liability of the RBI?

Answer 18

N.A

Question 19

19) Coins and currency in circulation are obviously with public. What part of bank’s money is considered in M0

Answer 19

N.A

Question 20

20) What is the 3rd source of M0 apart from Banks and Public?

Answer 20

N.A

Question 21

21) Can the public deposit money with the RBI?

Answer 21

N.A

Question 22

22) What is the theoretical formula for money multiplier?+ 3 reasons for deviation from this formula?

Answer 22

N.A

Question 23

23) Why incremental CRR was introduced?

Answer 23

N.A

Question 24

24) What are the 2 factors on which velocity of money circulation depends?

Answer 24

N.A

Question 25

25) CRR, SLR are based on which acts?

Answer 25

N.A

Question 26

26) Is any profit earned on CRR? On SLR?

Answer 26

N.A

Question 27

27) Explain the conceptual difference between CRR and SLR?

Answer 27

N.A

Question 28

28) CRR, SLR are explained as percentages of what?

Answer 28

N.A

Question 29

29) Is there any legal limit on CRR, SLR ?

Answer 29

N.A

Question 30

30) Does the SLR have an effect on money multiplier?

Answer 30

N.A

Question 31

31) What is Bank rate?

Answer 31

N.A

Question 32

32) What is repo rate?

Answer 32

N.A

Question 33

33) Which are the target institutions for repo rate?

Answer 33

N.A

Question 34

34) What is another name for Repo rate?

Answer 34

N.A

Question 35

35) What is the collateral in Repo rate?

Answer 35

N.A

Question 36

36) What is MSF and how it is different from LAF?

Answer 36

N.A

Question 37

37) What is the margin between MSF and LAF?

Answer 37

N.A

Question 38

38) Derive from first principles: What is the difference between the target institutions for MSF and LAF. Which of these two have limits on borrowing?

Answer 38

N.A

Question 39

39) Why are MSF and LAF less effective in India for monetary policy transmission in India?

Answer 39

N.A

Question 40

40) What is Tri party repo agreement?

Answer 40

N.A

Question 41

41) Who is the custodian in tri party repo?

Answer 41

N.A

Question 42

42) What are the 2 advantages of Tri party repo?

Answer 42

N.A

Question 43

43) What is the margin between repo and reverse Repo?

Answer 43

N.A

Question 44

44) what is reverse repo also known as?

Answer 44

N.A

Question 45

45) What are the 3 "window" operations by RBI?

Answer 45

N.A

Question 46

46) What is the "policy corridor"?

Answer 46

N.A

Question 47

47) When is the "policy corridor" altered?

Answer 47

N.A

Question 48

48) Why do banks borrow usually?

Answer 48

N.A

Question 49

49) What are the 2 rates in inter bank borrowing?

Answer 49

N.A

Question 50

50) What is OMO?

Answer 50

N.A

Question 51

51) What is MSS?

Answer 51

N.A

Question 52

52) What is Standing deposit facility?

Answer 52

N.A

Question 53

53) Who recommended Standing Deposit Facility?

Answer 53

N.A

Question 54

54) When was SDF announced and is it functional today?

Answer 54

N.A

Question 55

55) Generally explain with examples, the differences between quantitative and qualitative for transmission of Monetary policy

Answer 55

N.A

Question 56

56) Just name the 4 qualitative tools for Monetary Policy transmission?

Answer 56

N.A

Question 57

57) Explain margin requirement/LTV ratio?

Answer 57

N.A

Question 58

58) What is the need for selective credit control?

Answer 58

N.A

Question 59

59) Explain -ve selective credit control with the 2 examples?

Answer 59

N.A

Question 60

60) Explain +ve selective credit control with the 2 examples?

Answer 60

N.A

Question 61

61) When did the RBI first use the word PSL?

Answer 61

N.A

Question 62

62) How much PSL quota in India and what are the 4 splits in PSL quota?

Answer 62

N.A

Question 63

63) How much subquota for weaker sections in PSL and what is the subsplit in that?

Answer 63

N.A

Question 64

64) How much subquota for Agriculture in PSL and what is the subsplit in that?

Answer 64

N.A

Question 65

65) How much subquota for MSME and KVIC in PSL and how are they defined?

Answer 65

N.A

Question 66

66) New categories added to PSL in 2015. Expand: PXSSRFV

Answer 66

N.A

Question 67

67) Across commercial, cooperative and NBFI categories, name the entities on which PSL is not applicable?

Answer 67

N.A

Question 68

68) Sub category of commercial banks on which 40 % PSL is applicable?

Answer 68

N.A

Question 69

69) Sub category of commercial banks on which 75 % PSL is applicable?

Answer 69

N.A

Question 70

70) Differential bank with 40% PSL?

Answer 70

N.A

Question 71

71) Is PSL applicable on cooperative banks?

Answer 71

N.A

Question 72

72) What if a company fails to uphold PSL obligations?

Answer 72

N.A

Question 73

73) What are PSL certificates?

Answer 73

N.A

Question 74

74) Where PSLC are sold?

Answer 74

N.A

Question 75

75) What are the 3 categories of PSL under which PSLC are sold?

Answer 75

N.A

Question 76

76) Explain CRR, SLR and PSL applicablity on RRBs, Cooperatives?

Answer 76

N.A