Advertisements
Advertisements
प्रश्न
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
Advertisements
उत्तर
- A country's central bank decides the margin requirement for secured loans as part of its credit control system. This is the percentage of the collateral's value that a borrower must provide as security for a loan.
- The central bank can limit the quantity of credit available to borrowers by adjusting the margin requirement.
- A greater margin requirement requires borrowers to produce more collateral, restricting the amount they can borrow.
- This enables the central bank to control the flow of credit in the economy, affecting inflation, consumption, and investment.
APPEARS IN
संबंधित प्रश्न
Briefly explain two qualitative methods of credit control adopted by this institution.
______ is a quantitative method of credit control.
In order to encourage investment in the economy, the central bank may ______.
During inflation, the central bank usually:
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Bank rate is a quantitative instrument of monetary policy.
Reason (R): During inflation, RBI reduces the bank rate.
Differentiate between quantitative and qualitative methods of credit control.
Define the following term:
Margin Requirements.
What is the credit supply policy in an economy called?
Identify the following Credit Control measure undertaken by the Central Bank during inflation.
The Central Bank sells government approved securities to the public.
What do you mean by credit control?
