Liberalisation, Privatisation And Globalisation : An Appraisal

Question 21

What is free convertibility?


An attribute of a currency which is freely exchangeable for another currency or for gold is called free convertibility.

Question 22

Why did RBI have to change its role from controller to facilitator of financial sector in India?


The most important function of Reserve Bank of India is to interfere in banks lending operations, capital adequacy and accounting norms for safeguarding the interests of the account holders and to regulate the total volume of lending and interest rates in public interest.

Question 23

How is RBI controlling the commercial banks?


RBI is the Central Bank of India. It controls the commercial banks in various ways. It grants permission for banking activity It frames the policies regarding interest rate, volume of lendihg and safeguards the interests of account holders.

Question 24

What do you understand by devaluation of rupee?


A fall in the fixed exchange rate between one currency and the others is called devaluation. To increase exports of the country, devaluation of Indian currency was adopted from time to time.

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