SSC Economics Sample Paper NCERT Sample Paper-5

  • question_answer
    Which one of the following tools is used by RBI for selective credit control?

    A)  It advises banks to lend against certain commodities.

    B)  It advises banks to recall the loans for advances against certain commodities.

    C)  It advises banks to charge higher rate of interest for advance against certain commodities.

    D)  It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.

    Correct Answer: D

    Solution :

    [d] It is also known as qualitative credit control. This method is used to control the flow of credit to particular sectors of the economy. The direction of credit is regulated by the central bank. This method is used as a complementary to quantitative credit control discourage the flow of credit to unproductive sectors and speculative activities and also to attain price stability.

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