Economics • Banking & FinanceMedium
Under the regulatory framework of the Reserve Bank of India, what is the primary purpose of the 'Differential Rate of Interest (DRI)' scheme?
A. To provide bank credit at a concessional interest rate of 4% per annum to weaker sections of the society for productive endeavors✓ Correct Answer
B. To penalize commercial banks for maintaining excess cash reserves beyond statutory limits
C. To regulate foreign institutional investments in corporate debt instruments
D. To provide high-yielding deposit options exclusively for senior citizens
💡 Solution & Explanation
The Differential Rate of Interest scheme was launched by the Reserve Bank of India to provide credit at a concessional interest rate of four percent per annum to marginalized borrowers for productive activities. It aims to support low-income borrowers through institutional credit.
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