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1. Credit Rationing
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- In this, RBI controlled the maximum amount of credit flow to a certain sector.
- RBI may also make it compulsory for the banks to provide certain fractions of their loans to certain sectors such as priority sector lending etc.
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2. Selective Credit Control
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- Selective credit control is a tool in the hands of the Reserve Bank of India to restrict bank finance against sensitive commodities.
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3. Margin Requirement
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- RBI can prescribe margin against collateral. For instance, lend only 70 Rs. for 100 Rs. value Property, margin requirement being 30%. If RBI raises margin requirements, customers will be able to borrow less.
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4. Moral Suasion
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- Moral Suasion refers to a method of request, a method of advice by the RBI to the commercial banks to take certain measures as per the trend of the economy.
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5. Direct Action
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- RBI issues certain guidelines from time to time based on the current situation in the economy. These guidelines should be followed by banks. If any bank violates these guidelines RBI penalises them.
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6. Currency Policy RatesÂ
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- Policy Repo Rate‎: ‎4 %
- Reverse Repo Rate‎: ‎3.35%
- Bank Rate‎:4.25%
- Marginal Standing Facility Rate‎: 4.25%
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7. Reserve Ratio
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