Advertisements
Advertisements
प्रश्न
Explain how 'margin requirements' are helpful in controlling credit creation?
Advertisements
उत्तर
Margin requirement is the difference between the current value of the security given for a loan and the value of loan granted. For example, mortgaging land for Rs 100 lakh with the bank for a loan of Rs 75 lakh. So, the margin requirement would be Rs 25 lakh. Therefore, to control deflation, the central bank reduces the margin money requirement which induces borrowers to avail more loans from commercial banks.
shaalaa.com
क्या इस प्रश्न या उत्तर में कोई त्रुटि है?
