alleryWhich is a QUALITATIVE tool of monetary policy used by the RBI?
ABank rate change
BOpen market operations
CCash reserve ratio change
DMoral suasion (persuading banks to alter lending behaviour)
Answer & Solution
Correct answer: D. Moral suasion (persuading banks to alter lending behaviour)
**Quantitative tools:** CRR, SLR, bank rate, OMO, repo/reverse repo.
**Qualitative tools:** moral suasion, margin requirements, selective credit control — they target the COMPOSITION of credit, not the total quantity.
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