Good Morning
Dear Candidates,
Purpose : To prepare for written exam of SBI JUNIOR ASSOCIATES (CLERK)/ PO/IBPS PO/CLERK/RRB PO/ASSISTANT
Must spend one hour for this section.
Out of this one hour :
Spend 15 min :visit following very useful website,:
http://bankinterview.in/
on home page you will link for 600 important questions on banking/financial aspects. click that
Learn following :
Dear Candidates,
Purpose : To prepare for written exam of SBI JUNIOR ASSOCIATES (CLERK)/ PO/IBPS PO/CLERK/RRB PO/ASSISTANT
Must spend one hour for this section.
Out of this one hour :
Spend 15 min :visit following very useful website,:
http://bankinterview.in/
on home page you will link for 600 important questions on banking/financial aspects. click that
last year in all banking exam most questions came out of these questions only.
you must cram min 15 Questions out of these 600 QA today.
Spend 30 min :
read any current affair magazine
Spend 15 min:
Q:Why Credit control is treated as most important function of Reserve Bank of India.
A:Credit control in the economy is required for the smooth functioning of the economy.
By using credit control methods RBI tries to maintain monetary stability.
Q;Name types of methods.
A:There are two types of methods:
1. Quantitative control to regulates the volume of total credit.
2. Qualitative Control to regulates the flow of credit.
Q: List type of Quantitative methods.
A:
1. Management of Bank Rate :By increasing or reducing Bank rate, RBI works on pricing of funds. It is assumed as and when funds becomes costly, it would result in lower demand of fund, conversely
it is assumed as and when funds becomes cheaper, it would result in higher demand of fund.
A:Credit control in the economy is required for the smooth functioning of the economy.
By using credit control methods RBI tries to maintain monetary stability.
Q;Name types of methods.
A:There are two types of methods:
1. Quantitative control to regulates the volume of total credit.
2. Qualitative Control to regulates the flow of credit.
Q: List type of Quantitative methods.
A:
1. Management of Bank Rate :By increasing or reducing Bank rate, RBI works on pricing of funds. It is assumed as and when funds becomes costly, it would result in lower demand of fund, conversely
it is assumed as and when funds becomes cheaper, it would result in higher demand of fund.
2. Open market operations :
The term open market operation refers to purchase or sale of government securities by the central bank.Purchase of securities by the central bank in open market provides money to market/banks whereas sale of securities sucks money from market/banks .OMO is now very frequently used by RBI.
The term open market operation refers to purchase or sale of government securities by the central bank.Purchase of securities by the central bank in open market provides money to market/banks whereas sale of securities sucks money from market/banks .OMO is now very frequently used by RBI.
3. Management of Cash reserve ratio : Increase in CRR means Banks to keep more money with RBI , hence they will left with lower funds for lending.this affect supply of money in market,adversely.
4. Repo & Reverse Repo :By increasing or reducing REPO rate, RBI works on pricing of funds. It is assumed as and when funds becomes costly, it would result in lower demand of fund, conversely
it is assumed as and when funds becomes cheaper, it would result in higher demand of fund. It also affects the pricing of credit in market.
it is assumed as and when funds becomes cheaper, it would result in higher demand of fund. It also affects the pricing of credit in market.
5. Altering Statutory Liquidity Ratio:Increase in SLR means Banks to invest more money SLR securities , hence they will left with lower funds for lending.this affect supply of money in market,adversely.
6. MSF:By increasing or reducing MSF rate, RBI works on pricing of funds. It is assumed as and when funds becomes costly, it would result in lower demand of fund, conversely
it is assumed as and when funds becomes cheaper, it would result in higher demand of fund. It also affects the pricing of credit in market.
Q: List Qualitative Methods:
A:
1. Selective Qualitative Credit controls
By making changes in margin and rate of interest, RBI regulates credit in specific areas. normally this is used for sensitive items.
2. Moral persuasion and direct action :
RBI uses this technique to regulate flow of credit to specific sectors of economy. by imposing ban or by allowing higher flow of funds this is achieved.
it is assumed as and when funds becomes cheaper, it would result in higher demand of fund. It also affects the pricing of credit in market.
Q: List Qualitative Methods:
A:
1. Selective Qualitative Credit controls
By making changes in margin and rate of interest, RBI regulates credit in specific areas. normally this is used for sensitive items.
2. Moral persuasion and direct action :
RBI uses this technique to regulate flow of credit to specific sectors of economy. by imposing ban or by allowing higher flow of funds this is achieved.
.. Anil Aggarwal
Owner & Manager at Anil Aggarwal Coaching
(A proprietorship concern for IBPS exam guidance and Bank Interview preparation)
Mobile: +91 9811340788
E-mail ID: anilakshita@yahoo.co.in
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