Q.Explain the quantitative measures of monetary policy of R.B.I. [Any 5]

Five quantitative tools: Bank Rate, Repo/Reverse Repo Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and Open Market Operations (OMO) — all used to raise or lower the total volume of credit/money.

Quantitative (general) measures of RBI's monetary policy (any five):

1. Bank Rate — the rate at which the RBI lends long-term funds to commercial banks. Raising it makes borrowing costlier, reduces credit (contractionary); lowering it expands credit.
2. Repo Rate and Reverse Repo Rate — the repo rate is the rate at which RBI lends short-term funds to banks against securities; the reverse repo is the rate at which RBI borrows/absorbs funds from banks. A higher repo rate curbs credit; a lower one encourages it.
3. Cash Reserve Ratio (CRR) — the percentage of total deposits banks must keep as cash reserves with the RBI. A higher CRR leaves banks less to lend (reduces credit); a lower CRR increases lendable funds.
4. Statutory Liquidity Ratio (SLR) — the percentage of deposits banks must keep in liquid assets (cash, gold, approved government securities) with themselves. Raising SLR reduces credit capacity; lowering it increases it. …