BANKING AFFAIRS

Detailed explanation-1: -Quantitative or traditional methods of credit control include banks rate policy, open market operations and variable reserve ratio. Qualitative or selective methods of credit control include regulation of margin requirement, credit rationing, regulation of consumer credit and direct action.

Detailed explanation-2: -Quantitative credit control refers to overall credit in the economy, affecting all sectors of the economy equally and without discrimination. Qualitative credit control refers to selective credit control that focuses on allocation of credit to different sectors of the economy.

Detailed explanation-3: -The RBI uses Qualitative tools to directly control the credit flow to any sector of the economy based on macroeconomic situations. The Qualitative tools don’t increase or decrease the money supply or liquidity in the economy rather channel the available money to needed sectors of the economy.

Detailed explanation-4: -The different instruments of credit control used by the Reserve Bank of India are Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), the Bank Rate Policy, Selective Credit Control (SCC), Open Market Operations (OMOs).

Detailed explanation-5: -Methods Used By Rbi For Credit Control And Types Of Credit Control. RBI uses two types of credit control methods for money supply in the Indian economy, Qualitative and Quantitative.