BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To raise the cost of credit for all purposes.
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To decrease the total supply of credit in the economy.
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To regulate total Bank credit and general level of interest rates.
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To influence allocation of credit among different borrowers and users.
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Detailed explanation-1: -Selective credit controls are intended to encourage or discourage specific types of investment and expenditure by influencing the lending policy of banks and similar credit institutions.
Detailed explanation-2: -Credit rationing is a selective qualitative credit control method.
Detailed explanation-3: -Qualitative or selective credit control measures are used to regulate the flow of credit. These include Margin Requirements, Consumer Credit Regulation, Rationing of credit, Moral Suasion etc.
Detailed explanation-4: -Selective Credit Control by RBI It has been given authority and responsibility to regulate advances by commercial banks and determine government policies relating to bank loans when it considers it necessary to do so in the public interest or in the interests of the depositors in particular.