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Option 3 : B and E only
The incorrect answer is B and E only
RBI (Reserve Bank of India) -
- The central bank of the country is the Reserve Bank of India (RBI), commonly referred to as the banker's bank.
- RBI established in Under the provisions of the Reserve Bank of India Act, it started operating on April 1st, 1935.
- RBI was founded to promote financial stability in India by implementing monetary policies to ensure monetary stability.
- In addition to managing the country's monetary system, government debt, foreign exchange reserves, and financial regulation and supervision, it also serves as a banker to the country's banks and the government.
Ineffective tapping and mobilization of savings-
- The amount of money that lenders and investors are willing to save and invest can be influenced by interest rates.
- With high interest rate on saving, people tend to save more and vice versa.
- High interest rate on lending people will borrow less and vice versa.
- By cash reserve ratio, statutory liquidity ratio, Bank rate, repo rates and others rates RBI control money supply and inflation level of an economy.
- Hence, Ineffective tapping and mobilization of savings is an incorrect statement about RBI.
Blending of leading and trading activities:
- Blending of leading and trading activities cannot affect the structure of interest rates as these activities are managed by SEBI.
Treasury Bills -
- Treasury bills are part of organised money market. they are used by Central Govt. to fulfill short term liquidity requirement upto 364 days.
- First treasury bill issued in 1986.There total 5 types of treasury bills ; 14 days TBs, 14 days TBs (auctionable TBs), 91 days TBs, 182 days, 364 TBs.
- These also function as short term investment for Banks and Financial institution.
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