Negative Interest Rate
Understand Negative Interest Rate Policy (NIRP), how negative policy rates work, when central banks use them, their benefits and limitations for UPSC Economy.
Understand Negative Interest Rate Policy (NIRP), how negative policy rates work, when central banks use them, their benefits and limitations for UPSC Economy.
Understand liquidity trap, how extremely low interest rates and high preference for liquidity weaken monetary policy, its causes, features and measures to overcome it for UPSC Economy.
Learn about DICGC, its ₹5 lakh deposit insurance coverage, insured banks, excluded deposits, compulsory insurance and 90 day claim settlement rules for UPSC Prelims.
Understand the Monetary Policy Committee (MPC) of RBI, its composition, appointment, voting, quorum, functions, inflation targeting framework and significance for UPSC Economy.
Understand the Market Stabilisation Scheme (MSS), how it absorbs enduring surplus liquidity through special government securities, the MSS Account, sterilisation and difference from Open Market Operations for UPSC Economy.
Understand Open Market Operations (OMOs), how RBI purchases and sells government securities to inject or absorb durable liquidity, their objectives and impact for UPSC Economy.
Understand Statutory Liquidity Ratio (SLR), its meaning, objectives, eligible liquid assets, impact on bank lending, statutory basis and difference between SLR and CRR for UPSC Economy.
Understand Cash Reserve Ratio (CRR), its meaning, objectives, statutory basis, impact on liquidity and credit creation, NDTL and difference between CRR and SLR for UPSC Economy.
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