Which of the following are included in the definition of Narrow Money ?
- 1. Currency with the public
- 2. Demand deposits
- 3. ‘Other’ deposits with Reserve Bank of India
- 4. Banker’s deposits with Reserve Bank of India
Select the correct answer using the code given below :
1, 2 and 4
1 and 2 only
1, 2 and 3
3 and 4 only
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CDS-2 – 2023
2. **Demand deposits:** Deposits held by the public with commercial banks and co-operative banks that are withdrawable on demand (e.g., savings accounts, current accounts).
3. **’Other’ deposits with Reserve Bank of India:** Demand deposits with RBI of entities other than banks and the government (e.g., deposits of quasi-government institutions, international financial institutions like IMF).
4. **Banker’s deposits with Reserve Bank of India:** Deposits of commercial banks with the RBI, which form a part of the reserves maintained by banks. These are included in the definition of M0 (Reserve Money) but not M1 in the standard Indian monetary aggregates.