CThe RBI lends short-term funds to commercial banks
DCommercial banks lend to each other overnight
Question 2
SLR (Statutory Liquidity Ratio) requires banks to maintain a portion of their deposits in: (AFCAT PYQ)
ACash kept in their own vaults
BDeposits maintained with the RBI
CGold, cash, or approved government securities
DForeign currency deposits abroad
Question 3
When RBI buys government securities in the Open Market, the effect is: (AFCAT PYQ)
AMoney supply in the economy decreases
BMoney supply in the economy increases
CInflation is immediately and fully controlled
DGovernment borrowing costs increase sharply
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