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Which factor affects the uniformity of credit creation in commercial banks?
- a)Monetary policy of the central bank.
- b)Cash reserve ratio set by the RBI.
- c)Banking habits of the people.
- d)Supply of securities.
Correct answer is option 'A'. Can you explain this answer?
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Which factor affects the uniformity of credit creation in commercial b...
The text mentions that if all commercial banks follow a uniform policy related to the cash reserve ratio (CRR), credit creation would be smooth. This means that the monetary policy of the central bank, such as the Reserve Bank of India (RBI), plays a role in ensuring uniformity in credit creation among commercial banks.Interesting additional fact: The monetary policy of the central bank includes various tools and measures to regulate the money supply, interest rates, and credit availability in the economy. By setting consistent guidelines and policies, the central bank can promote stability, fairness, and efficient credit creation across commercial banks.
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Which factor affects the uniformity of credit creation in commercial banks?a)Monetary policy of the central bank.b)Cash reserve ratio set by the RBI.c)Banking habits of the people.d)Supply of securities.Correct answer is option 'A'. Can you explain this answer?
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