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Commerce-2014: Answer Writing Challenge – 16


30 October 2014

1) “Rapid financial innovations have led to the emergence of several new near substitutes for money.” Discuss at least two such instruments and analyse their impact on the monetary policy of RBI. (250 Words)

2) “Asset-based reserve requirement of financial institutions as against deposit-based reserve requirement of banks can go a long way in preventing slippage in monetary policy transmission.” Critically analyse the statement and discuss the mechanism and modalities of the two systems. (250 Words)

3) Classify various securities investment of commercial banks. Also mention how these are valued. Under what circumstances is migration
of securities from one category to another allowed ?  (250 Words)