Credit Policy
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary distinction between monetary policy and credit policy?
Monetary policy addresses the overall money supply and price level at a macro level, while credit policy focuses on the direction, cost, and availability of bank credit to specific sectors of the economy.
What is the correct description of credit policy's scope in the economy?
It covers cost and availability of bank credit to specific sectors.
Which institution is responsible for administering credit policy in India?
The Reserve Bank of India (RBI) administers credit policy, not the Finance Ministry.
How is credit policy described in relation to monetary policy?
Credit policy is an adjunct or supplement to monetary policy.
How does credit policy relate to monetary policy in its operational scope?
Credit policy and monetary policy are complementary rather than alternatives; credit policy operates at the sector level while monetary policy operates at the broader macro-economic level.
Can the central bank control real credit by varying reserve money?
No, it controls only nominal credit, not real credit.
What are the three key dimensions that credit policy focuses on?
Credit policy focuses on the direction, cost, and availability of bank credit to specific sectors of the economy.
What determines the volume of credit in the economy according to RBI?
Public's asset preferences and deposit mobilisation determine credit volume.
MCQ practice tests
Chapter-wise mock tests with instant scoring.
More chapters in Module A - Rationale and Functions of Central Bank
Related articles & notes
In-depth Central Banking (Elective) guides from our blog.
Master the full CB syllabus
Every chapter of Central Banking (Elective) — videos, tests, notes and one-liner decks in one place.