Daily Current Affairs Quiz: February 04, 2026

Statement 1 is correct: Reduction in reserve requirements (CRR/SLR) frees bank funds, increases liquidity, and encourages lending—key objectives of accommodative monetary policy to stimulate economic activity.

Statement 2 is correct: Purchase of government securities by the Reserve Bank of India injects money into the banking system through Open Market Operations, expanding liquidity and supporting growth.

Bank Rate is the rate at which the Reserve Bank of India provides long-term funds to commercial banks. It signals RBI’s monetary policy stance and influences overall interest rates.

Statement 1 is correct: CRR requires banks to keep a fixed percentage of their Net Demand and Time Liabilities as cash with the Reserve Bank of India to regulate liquidity.

Statement 2 is correct: SLR mandates banks to maintain a prescribed portion of deposits in liquid assets like government securities, gold, or cash, ensuring solvency and controlling credit expansion.

Open Market Operations (OMO) refers to the buying and selling of government securities by the Reserve Bank of India to regulate liquidity and control money supply in the economy.

Margin Requirements refer to the gap between the market value of collateral and the loan amount. By changing margins, the Reserve Bank of India regulates credit flow and curbs speculative lending.