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CREDIT POLICY
What is the primary objective of credit policy as administered by the Reserve Bank of India?
The primary objective of credit policy is to regulate the flow of credit in the economy to ensure price stability, support economic growth, and maintain financial stability.
What is the floor rate of the interest rate corridor maintained by RBI's LAF?
The Standing Deposit Facility (SDF) rate forms the floor.
How does the RBI use the Cash Reserve Ratio (CRR) as a credit policy tool?
CRR is the mandatory percentage of a bank's net demand and time liabilities (NDTL) that must be maintained as cash with RBI; raising CRR absorbs liquidity and reduces credit expansion, while lowering it releases funds for lending.
What is the ceiling rate of RBI's interest rate corridor?
The Marginal Standing Facility (MSF) rate forms the ceiling.
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