MONETARY POLICY

Question 1

WHAT IS MONETARY POLICY ?

Answer 1

Question 2

WHEN WAS NEW MONETARY POLICY FRAMEWORK SIGNED BETWEEN GOVT OF INDIA & RBI

Answer 2

2015

Question 3

WHAT IS THE INFLATION TARGET FOR MONETARY POLICY

Answer 3

Question 4

WHAT IS INFLATION IN CONTEXT OF MONETARY POLICY

Answer 4

Question 5

WHO PUBLISHES CPI (COMBINED)

Answer 5

• MINISTRY OF STATISTICS & PROGRAM IMPLEMENTATION
• NSO

Question 6

WHO DECIDES INFLATION TARGET

Answer 6

Question 7

WHEN WE CAN SAY THAT RBI HAD FAILED THE INFLATION TARGETS ?

Answer 7

INFLATION ABOVE 6%

Question 8

WHO DECIDES THE REPO RATE ??

Answer 8

MPC

Question 9

IS IT MANDATORY TO MPC TO MEET 6 TIMES A YEAR ??

Answer 9

4 TIMES IS MANDATORY BUT MPC IS MEETING BI MONTHLY NOW DAYS

Question 10

TELL ME ABOUT THE MEMBERSHIP OF MPC

Answer 10

Question 11

RBI GOVERNOR CANNOT VOTE IN FIRST INSTANCE IN MPC

Answer 11

• FALSE, HE CAN VOTE IN FIRST INSTANCE
• HE ALSO GETS SECOND VOTE WHICH IS CASTING VOTE IN CASE OF TIE

Question 12

DECISION OF MPC IS BINDING ON RBI ???

Answer 12

YES

Question 13

MPC ALSO HAS AUTHORITY ON REVERSE REPO RATE, CRR, SLR ??

Answer 13

IT ONLY HAS AUTHORITY ON REPO RATE

Question 14

RUPEE PRICE FLUCTUATION IS ALSO A FACTOR KEPT IN MIND BY THE MPC ?

Answer 14

Question 15

GIVE ME THE LIST OF 10 TOOLS OF MONETARY POLICY

Answer 15

1. REPO
2. REVERSE REPO
3. SDF (STANDING DEPOIST FACILITY)
4. MSF
5. BANK RATE
6. LAF - (LTRO)
7. LAF CORRIDOR
8. FRACTIONAL RESERVE BANKING (CRR,SLR)
9. OMO
10. MSS - STERILIZATION

Question 16

WHAT IS ANOTHER NAME OF REPO RATE

Answer 16

POLICY RATE

Question 17

WHAT IS THE LIMIT OF INTEREST RATE IN REPO

Answer 17

0.25% OF NDTL

Question 18

FULL FORM OF REPO

Answer 18

Question 19

REPO CAN BE RETUREND IN 14 DAYS

Answer 19

NO, IT MUST BE RETURNED OVERNIGHT

Question 20

WHAT IS RBI DOING IN REVERSE REPO?

Answer 20

Question 21

BANKS CAN DEPOSIT UNLIMITED AMOUNT IN REVERSE REPO

Answer 21

YES FOR NOW, BUT RBI HAS POWER TO PUT CAP ALSO

Question 22

WHAT IS THE MAJOR DIFFERENCE BETWEEN SDF & REVERSE REPO

Answer 22

• NO COLLATERAL NEEDED AS COMPARED TO REVERSE REPO
• AVAILABLE ALL TIME, NOT JUST ONLY ON THE DISCRETION OF RBI

Question 23

WHAT IS SDF?

Answer 23

Question 24

IS SDF IS FOR OVERNIGHT ?

Answer 24

YES, BUT CAN BE INCREASED IN FUTURE

Question 25

WHAT IS MSF ?

Answer 25

Question 26

IN WHAT WAY SLR IS RELATED TO MSF ?

Answer 26

MSF ENABLES SCHEDULED COMMERCIAL BANKS TO TAKE

Question 27

KEY DIFFERENCE BETWEEN MSF & REPO RATE

Answer 27

Question 28

BANK RATE IS MOST ACTIVE TOOL OF MONETARY MANAGEMENT

Answer 28

Question 29

WHAT IS THE PURPOSE OF LAF

Answer 29

Question 30

WHAT IS TERM REPO ?

Answer 30

Question 31

ADVANTAGES OF TERM REPO?

Answer 31

Question 32

WHAT IS LTRO

Answer 32

Question 33

EXPLAIN THE AUCTION SYSTEM IN LTRO

Answer 33

Question 34

IS THEIR ANY LONG TERM FOR REVERSE REPO

Answer 34

YES

Question 35

WHAT IS TARGETED LTRO (TLTRO)

Answer 35

Question 36

WHAT IS LAF CORRIDOR

Answer 36

Question 37

GIVE 2 TYPES OF RESERVE BANKING ? | FRACTIONAL RESERVE BANKING

Answer 37

CRR, SLR

Question 38

WHAT IS CRR

Answer 38

Question 39

TIME OF CRR

Answer 39

FORTNIGHTLY BASIS

Question 40

IS THEIR ANY CELING RATE IN CRR ?

Answer 40

NO

Question 41

WHAT IS SLR ?

Answer 41

AMOUNT BANK REQUIRES TO MAINTAIN WITH THEMSELVES ON DAILY BASIS

Question 42

WHAT IS THE TIME BASIS OF SLR

Answer 42

DAILY BASIS

Question 43

CAN EXCESS CRR BE TREATED AS SLR LIUID ASSET ?

Answer 43

YES

Question 44

WHAT IS THE CELING RATE OF SLR ?

Answer 44

40%

Question 45

CAN SLR BE MAINTAINED AS CASH BALANCE WITH RBI ?

Answer 45

YES IT CAN

Question 46

WHAT IS THE LOGIC BEHIND CRR, SLR

Answer 46

Question 47

NON SCHEDULED BANKS ARE NOT REQUIRED TO MAKE CRR & SLR DEPOSIT

Answer 47

FALSE

Question 48

IS THE SAME RBI ACT GOVENING CRR FOR BOTH SCHEDULE & NON SCHEDULE BANKS

Answer 48

NO

Question 49

IS SLR FOR BOTH SCHEDULED & NON SCHEDULED BANK IS DERIVED FROM SAME ACT

Answer 49

YES, BANKING REGULATION ACT 1949

Question 50

WHAT IS OPEN MARKET ?

Answer 50

SECONDARY MARKET

Question 51

WHA TIS OPEN MARKET OPERATION

Answer 51

Question 52

WHAT IS RBI GONNA DO IN OMO WHEN THEY WANT TO INCREASE THE MONEY SUPPLY

Answer 52

BUY MORE G SEC

Question 53

EXPLAIN ME THE 2 TYPES OF OMO

Answer 53

Question 54

WHY INFLATION HAPPENS WITH INCOMING FOREGIN INVESTMENT

Answer 54

Question 55

WHY RBI NEED TO DO STERILISATION/ MARKET STABLISATION SCHEME (MSS)

Answer 55

Question 56

IS THEIR ANY INTEREST PAYMENT WHEN INSTITUTION BUYS MARKET SATBLISATION BOND

Answer 56

Question 57

WHAT ARE THE 2 STANCES OF MONETARY POLICY

Answer 57