CBSE Questions for Class 12 Commerce Economics Money And Banking Quiz 2 - MCQExams.com

The Cash Reserve Ratio refers to a certain percentage of total deposits the commercial banks are required to maintain in the form of cash reserve with the Reserve Bank of India.

 If the CRR is decreased, then commercial banks have more deposits to give to the public in the form of loans.

Thus, the credit available to the public will increase.

The Cash Reserve Ratio refers to a certain percentage of total deposits the commercial banks are required to maintain in the form of cash reserve with the Reserve Bank of India.

The objective of maintaining the cash reserve is to prevent the shortage of funds in meeting the demand by the depositor.

If there had been no government rules, the commercial banks would keep a very low percentage of their deposits in the form of reserves.

Presently the CRR is 4% in India.

• RBI is the central bank of India
  
• RBI prints and circulates paper currency and coins except One Rupee coins on behalf of Government of India.
• Finance Ministry prints One Rupee Coins.
• Monetary policy (Money supply system)  is regulated by RBI
  

• RBI is the central bank of India
  
• Monetary policy (Money supply system)  is regulated by RBI
• Supervision of credit activities in formal/ regulated sector is one of the main functions of RBI.
  
• RBI prints and circulates paper currency and coins except One Rupee coins on behalf of Government of India.
• RBI is also Bankers' bank.
• The correct option is D.
  

NABARD was established on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premier agencies providing developmental credit in rural areas. NABARD is India's specialised bank for Agriculture and Rural Development in India.

Indian Audit and Accounts Service (IAAS) is an Indian Central Government service, free of control from any executive authority, under the Comptroller and Auditor General of India. The officers of the Indian Audit and Accounts Department serve in an audit managerial capacity. IAAS is responsible for auditing the accounts of the Union and State governments and public sector organizations, and for maintaining the accounts of State governments.

Hence, option (C) is the correct answer.

Major functions of the RBI are as follows:

1. Issue of Bank Notes

2. Banker to Government

3. Custodian of Cash Reserves of Commercial Banks

4. Custodian of Country’s Foreign Currency Reserves

5. Lender of Last Resort

6. Central Clearance and Accounts Settlement

7. Controller of Credit

Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of cash, or gold or govt. approved securities before providing credit to the customers. Here by approved securities we mean, bond and shares of different companies.