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प्रश्न
Explain how credit rationing helps to control credit in an economy.
Explain how margin money helps to control credit in an economy.
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उत्तर
- Credit Rationing - In this method, the 'Central Bank' imposes restrictions on demand of accommodation for more credits by the commercial banks. The 'Central Bank' limits the credit available to each of the commercial banks. Thus, this method of credit rationing directly affects the credit-granting (lending) capacity of commercial banks.
- Margin money - Margin requirement is a credit management tool utilized by institutions like banks. It represents the collateral amount a borrower must furnish to secure a loan, usually stated as a percentage of the entire transaction value. Implementing a margin requirement allows the lender to control the extent of credit extended to the borrower or trader. To mitigate credit, the RBI can raise the margin requirement.
Notes
Students should refer to the answer according to their questions.
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संबंधित प्रश्न
Define bank rate.
The rate of which commercial banks borrow from the Central Bank is the:
During deflation, the Central Bank usually ______.
______ is a quantitative method of credit control.
During inflation, the central bank usually:
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Differentiate between quantitative and qualitative methods of credit control.
What is this policy called that controls the credit supply in an economy?
Identify the following Credit Control measures undertaken by the Central Bank during inflation.
The Central Bank increases the rate at which it lends to the Commercial Bank.
What are quantitative methods of credit control?
