BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Selective credit control
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Moral suasion
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Credit authorization scheme
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All of the above
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Detailed explanation-1: -Regulation of consumer credit act as a qualitative credit control measure of the central bank as in the time of inflation or deflation, they regulate the consumer credit on a certain relative products in order to regulate uncertain market conditions.
Detailed explanation-2: -Explanation: The RBI controls the money supply in the economy through quantitative and qualitative tools. Under Quantitative measures money supply is controlled through tools like CRR, or bank rate or open market operations.
Detailed explanation-3: -The important qualitative or selective methods of credit control are; (a) Marginal Requirements, (b) Regulation of Consumer Credit, (c) Credit Rationing, (d) Moral Suasion and (e) Direct Action.
Detailed explanation-4: -For controlling the credit, inflation and money supply, RBI will increase the Bank Rate. Open Market Operations refer to direct sales and purchase of securities and bills in the open market by Reserve bank of India. The aim is to control volume of credit.