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Which of the following countercyclical tools has the Reserve Bank of India advised banks to create?

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in UPSC Prelims Challenge by (16.4k points)
  1. Investment Fluctuation Reserve
  2. Digital Asset Reserve
  3. Interest Rate Reserve

(a) 1 only

(b) 2 only

(c) 3 only

(d) 1 and 2 only

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Answer: (a) 1 only

 

Explanation: The Reserve Bank of India's guidelines of 2018 advised banks to create an Investment Fluctuation Reserve, which is a countercyclical tool that has relatively insulated Indian lenders from interest rate risks. Therefore, option (a) is correct.

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