Advertisements
Advertisements
प्रश्न
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.
Advertisements
उत्तर
Increasing the lending rate to commercial banks is referred to as increasing the Bank Rate. By increasing the bank rate, the cost of borrowing for commercial banks rises, leading to higher lending costs for businesses and consumers. This reduces the effects of inflation.
APPEARS IN
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.
Which of the following is not a quantitative method of credit control?
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Increase in cash reserve ratio adversely affects the capacity of commercial banks to create credit.
Reason (R): An increase in cash reserve ratio reduces the excess reserves of commercial banks and hence limits their credit creating power.
What is meant by open market operations?
Which are qualitative methods of credit control?
Give an example of margin requirements.
Describe two quantitative credit control measures of the Central Bank.
