Which of the following is not a qualitative tool used by RBI to control the flow of liquidity?
Which of the following is not a qualitative tool used by RBI to control the flow of liquidity?
1). RBI Guidelines
2). Moral Suasion
3). Open Market Operations
4). Rationing of Credit
1 answers
- RBI uses quantitative as well as qualitative tools for credit control which is required for the functioning of the economy.
- Quantitative tools are used to control the quantity of liquidity in the economy. CRR, SLR, Bank Rate, LAF, MSFR, and Open Market Operations (OMO) are quantitative tools.
- Qualitative tools are used to control the flow of liquidity. These tools are RBI guidelines, Marginal requirements. Consumer credit regulation, Moral suasion, Rationing of credit and Direct Action.
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