- Credit creation is primarily a function of commercial banks, not the Reserve Bank of India (RBI). Commercial banks create credit by lending money from deposits. - The RBI controls the volume and flow of credit in the economy through various monetary policy tools. - Quantitative controls, such as CRR, SLR, Repo Rate, etc., are tools used by the RBI to influence the overall credit supply in the banking system. Scheduled Banks are the entities on which these controls are imposed by the RBI, but Scheduled Banks do not exercise quantitative control themselves. - Commercial banks accept deposits from the public, which is one of their core functions. - The RBI is the central bank and is responsible for controlling credit in the economy to maintain price stability and support growth.
Which of the following is/are incorrectly matched? Select your answer using the codes given below I. Credit creation - Reserve Bank of India II. Commercial Bank - Accepting deposits III. Reserve Bank of India - Control of credit IV. Quantitative Control - Scheduled Banks
Asked in TNPSC CS Prelims 2015 · Topic: Money & Banking (Monetary Policy: Objectives, Instruments (quantitative and qualitative), and Transmission Mechanism)
More Economic Development questions
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