Advertisements
Advertisements
Question
The difference between the value of security and the amount of loan sanctioned against these securities is known as:
Options
Credit rationing
Margin requirement
Direct Action
Regulation of consumer credit
Advertisements
Solution
Margin requirement
Explanation:
The disparity between the security's value and the approved loan amount against said securities is referred to as margin requirements. This serves as one of the qualitative instruments for credit control employed by the central bank.
RELATED QUESTIONS
Which of the following is a selective/qualitative method of credit control.
In order to encourage investment in the economy, the central bank may ______.
Bank rate is the rate at which:
The process of buying and selling of securities by the central bank of a country is known as ______.
Define the term Statutory Liquidity Ratio.
Differentiate between quantitative and qualitative methods of credit control.
Which of the following statements are correct and which are incorrect? Give reasons.
- Central bank is a currency authority.
- Bank rate is a qualitative method of credit control.
- Quantitative methods regulate direction of credit.
- Bank rate is the rate at which commercial banks give loans to the public.
- Central bank should sell government securities when credit is to be expanded.
Who controls the credit supply in an economy?
Identify the following Credit Control measure undertaken by the Central Bank during inflation.
The Central Bank sells government approved securities to the public.
Which are qualitative methods of credit control?
