Current Affairs · Macroeconomics and Banking Policy
The Government of India's macroeconomic stabilization framework is designed to integrate long-term statutory price stability with agile regulatory curbs on currency speculation to counter global energy shocks. Which of the following combinations correctly identifies the statutory basis for inflation targeting, the defined upper and lower tolerance limits for the 2026–2031 period, the specific uniform daily cap on banks' Net Open Position (NOP), and the regulatory approach that this uniform cap replaced?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Section 45ZA of the RBI Act, 2% to 6% tolerance range, $100 million daily cap, and the flexible framework of decentralized risk limits.✓
- 2Section 45ZC of the Banking Regulation Act, 4% to 6% tolerance range, $100 million daily cap, and the individual bank-led capital adequacy model.
- 3Section 45ZA of the RBI Act, 1% to 7% tolerance range, $50 million daily cap, and the sector-specific risk-weighting mechanism.
- 4Section 45ZB of the RBI Act, 3% to 5% tolerance range, $150 million daily cap, and the fixed centralized risk limit framework.
Correct answer
Section 45ZA of the RBI Act, 2% to 6% tolerance range, $100 million daily cap, and the flexible framework of decentralized risk limits.
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