Match the Reserve Bank of India (RBI) monetary policy terms in List I with their corresponding functional descriptions in List II.
- Cash Reserve Ratio (CRR)Minimum percentage of deposits banks must keep as cash balance directly with the RBI
- Statutory Liquidity Ratio (SLR)Minimum percentage of deposits banks must maintain in specified liquid assets like government securities
- Marginal Standing Facility (MSF)Overnight borrowing window for scheduled banks to borrow funds from RBI at a higher rate against government securities
- Standing Deposit Facility (SDF)Collateral-free facility used by the RBI to absorb surplus liquidity from commercial banks
Answer
Cash Reserve Ratio (CRR) matches with the minimum cash percentage kept with RBI; Statutory Liquidity Ratio (SLR) matches with liquid assets held in gold/G-secs; Marginal Standing Facility (MSF) matches with the overnight borrowing window at a higher rate; Standing Deposit Facility (SDF) matches with collateral-free liquidity absorption.
Each monetary policy tool matches its exact operational definition under the RBI framework: CRR specifies cash held with RBI, SLR specifies liquid assets held by banks, MSF provides overnight borrowing under liquidity distress, and SDF absorbs excess liquidity without requiring collateral.
Step-by-Step Solution
Key Concept
RBI Monetary Policy Reserve Requirements and Liquidity Management Facilities
Estimated Time:1m 0s