#1
15th December 2015, 10:57 AM
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Credit Control of Central Bank of India
I am making my final year project report on Central Bank of India and want to know details about Credit Control of Central Bank of India. Will you please tell me purpose of this credit control and also tell me lists of method applied for doing this credit control?
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#2
15th December 2015, 10:58 AM
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Re: Credit Control of Central Bank of India
Credit control is an important tool used by Reserve Bank of India, a major weapon of the monetary policy used to control the demand and supply of money (liquidity) in the economy. Central Bank administers control over the credit that the commercial banks grant. The purposely of the credit control are given below: a. Stability of internal prices. b. Stability of the foreign exchange rate. c. Promoting high employment. Methods of credit control There are two methods that the RBI uses to control the money supply in the economy- Qualitative method Quantitative method Method of credit control: The contract bank controls the volume of credit through quantitative and qualitative methods. 1. Quantitative methods: The quantitative methods relative to the increase or decrease in the volume of credit. These methods are as follows: Bank rate policy Open market operation 2. Qualitative methods: These methods relates to establishment of rules under which credit creation can be allowed. The qualitative methods are as follows. Credit rationing Direct action Moral persuation Margin requirement |