Question

Sagarika wants to buy a car worth 10 lakhs. She has only 3 lakhs and plans to borrow the remaining amount from the bank.

Name and briefly explain the selective credit control measure that enables Sagarika to get maximum loan from the bank.

Answer 1

The selective credit control measure applicable in this case is the Margin Requirement.

Explanation:

The amount the user has to pay back themselves, and the bank pays the rest. This is called the “margin requirement.” The central bank has lowered the reserve requirement, allowing borrowers like Sagarika to get a larger loan while paying less up front.