Question

Consider the following kinds of credit controls:
1) Minimum margins for lending against specific securities.
2) Ceiling on the amounts of credit for certain purposes.
3) Discriminatory rate of interest charged on certain types of advances.
Which of the credit controls given above are used by RBI as a selective credit control measures?

• A. 1 and 2
• B. 1 and 3
• C. 2 and 3
• D. All of these

Answer 1

The correct option is D All of these

• There are two different types of credit control measures used by RBI: Quantitative and Qualitative.

• Quantitative measures are used to regulate the volume of credit and these include Open Market Operations, SLR, CRR etc.
• Qualitative or selective credit control measures are used to regulate the flow of credit. These include Margin Requirements, Consumer Credit Regulation, Rationing of credit, Moral Suasion etc.
• All the three measures given in the question thus come under qualitative or selective credit control measures.