Question

What is difference between Selective credit control and rationing of credit?

Answer 1

Dear Shivang,

Selective Credit Control are qualitative methods of regulating and controlling the credit availability among various users. The main instruments of selective credit control are- Regulation of consumer credit, regulation of margin requirement, credit rationing, moral suasion, etc.
While
Rationing of credit is an instrument of selective credit control. In this, the Central Bank can fix the maximum amount of loans which a commercial bank can give.
Selective credit control is a broader term as rationing of credit is a part of it.

Regards