Which of the following is/are the selective credit control measures of RBI? 1) Cash Reserve Ratio 2) Statutory Liquidity Ratio 3) Margin requirements 4) Moral suasion Choose the correct answer using the codes given below.
A
1 and 2
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B
3 and 4
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C
Only 4
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D
All of these
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Solution
The correct option is B 3 and 4
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.