A) Increasing Cash Reserve Ratio
B) Increasing Reverse Repo rate
C) Reduction in Repo rate
D) Only [a] and [b]
Correct Answer: D
Solution :
The Reserve Bank of India increases both CRR (specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves with RBI) and Reverse Repo Rate (rate at which banks park their short-term excess liquidity with the RBI) to decrease liquidity in the market.
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