Question

Answer in detail.
Explain the Regulation of Consumer Credit as a qualitative measure of the Central Bank of India?

Answer 1

Consumer credit refers to a personal debt taken by a consumer on the purchase of goods and services for the satisfaction of wants. Regulation of consumer credit acts as a qualitative credit control measure of the central bank. During inflation, they ban the consumer credit on certain products which have high prices that decrease the demand for such products and during deflation they allow consumer credit on all the products in order to increase the demand for such products.