Which of the following statement(s) is/are correct?
A. Only I
B. I and II
C. I and III
D. All of the above
Answer:D
Which of the following statement(s) is/are correct?
A. Only I B. I and II C. I and III D. All of the above
Explanation: “Small” savings schemes were initially created to mobilise saving by encouraging “small earners” to save, and offered above market deposit rates in accessible locations like post offices for this purpose. Recent discussions have focused on one efficiency cost of “small” savings schemes – how they hinder monetary policy transmission. Because small savings schemes offer high and fixed deposit rates (within year) and compete with banks, it is difficult for banks to reduce their own deposit rates and hence pass on policy rate cuts to consumers in form of lower lending rates. Recently, the government has reduced rates on some small savings schemes to make them more responsive to market conditions.