Match the following groups:
Group A
1. Central Bank
2. Clearing house system
3. Credit Control
4. Direct Action
5. Open market Operations
Group B
a. Quantitative measure of credit
b. Apex banking institution
c. Deliberate buying and selling of government securities
d. Selective method of credit control
e. Central Bank
f. Government
g. S.L.R. (Statutory Liquity Ratio)
Answers
The two columns are matched as follows:
1. Central Bank- apex banking institution ( regulates activities of all other commercial banks).
2. Clearing house system- central bank( RBI serves as the clearing house for all other commercial banks).
3. Credit Control- S.L.R. (Statutory Liquity Ratio)- minimum assets kept by the commercial banks with RBI which can be controlled.
4. Direct Action- Quantitative measure of credit( action taken by RBI in case the commercial banks fail to follow the guidelines given by it).
5. Open market Operations- Deliberate buying and selling of government securities( takes place in open market either to commercial banks or public).
1. Central Bank- apex banking institution
2. Clearing house system- central bank
3. Credit Control- S.L.R. (Statutory Liquidity Ratio)
4. Direct Action- Quantitative measure of credit
5. Open market Operations- Deliberate buying and selling of government securities
Explanation:
1. Central Bank is an apex banking institution which regulates activities of all other commercial banks .
2. Central bank is a clearing house for the settlement of accounts of commercial banks.
3. Statutory Liquidity Ratio is the ratio of a 'bank's liquid assets' to a 'bank's net demand'.
4. Quantitative measure or methods of credit control include 'banks rate policy', 'open market operations' and 'variable reserve ratio'.
5. 'Open market operations' is the 'sale and purchase' of 'government securities' and 'treasury bills' by RBI.
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