How does RBI control banks?

1.	How does RBI control banks?
Answer» Answer: RBI controls INFLATION using monetary POLICY. It controls borrowing rates for banks by setting the repo rate. When RBI wants to CONTROL inflation it increases these rates. As a RESULT, banks and other lenders are required to pay a higher interest rate to the Central Bank in order to obtain money.

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Answer:

RBI controls INFLATION using monetary POLICY. It controls borrowing rates for banks by setting the repo rate. When RBI wants to CONTROL inflation it increases these rates. As a RESULT, banks and other lenders are required to pay a higher interest rate to the Central Bank in order to obtain money.

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How does RBI control banks?

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