Which of the following is a quantitative tool of credit control by the reserve bank of India?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Open market operations.
The Reserve Bank of India (RBI) uses credit control measures to regulate the flow of credit in the economy.
These tools are divided into two types:
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Quantitative (General) tools – affect the overall volume of credit in the economy.
Examples:-
Bank Rate Policy
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Cash Reserve Ratio (CRR)
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Statutory Liquidity Ratio (SLR)
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Open Market Operations (OMO)
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Qualitative (Selective) tools – influence the direction or use of credit.
Examples:-
Margin Requirements
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Moral Suasion
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Direct Action
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