Which of the following is considered a primary quantitative tool of monetary policy used by the Reserve Bank of India?

💡 Solution & Explanation

The Cash Reserve Ratio is a mandatory quantitative monetary policy instrument requiring scheduled commercial banks to maintain a specified percentage of their total demand and time liabilities as liquid cash reserves with the central bank. Moral suasion is a qualitative or selective instrument involving persuasion and informal directives issued by the central bank. Consumer credit regulation restricts installment buying for specific commodities selectively. Direct action involves penalizing non-compliant institutions rather than managing macroeconomic liquidity.