Question

the RBI fixes the maximum amount of credit given to a particular use of sector this is called as​

Answer 1

Answer: Priority sector landing

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Answer 2

Answer:

Priority sector landing

The RBI fixes the maximum amount of credit given to a particular use of sector this is called as​ Priority sector landing.

Explanation:

The RBI fixes the maximum amount of credit given to a particular use of sector this is called as​ Priority sector landing .

Previously, the RBI could impose a CRR with a floor of $3$% and a ceiling of $20$%; however, since $2006$, there is no minimum or maximum level of CRR that must be fixed by the central bank of India. Currently, the RBI does not pay interest on CRR deposits to banks.

Credit rationing is the practice of lenders limiting the supply of additional credit to borrowers who request funds at a fixed quoted rate. It is an example of market failure because the price mechanism fails to achieve market equilibrium.