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प्रश्न
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
उत्तर
- A country's central bank decides the margin requirement for secured loans as part of its credit control system. This is the percentage of the collateral's value that a borrower must provide as security for a loan.
- The central bank can limit the quantity of credit available to borrowers by adjusting the margin requirement.
- A greater margin requirement requires borrowers to produce more collateral, restricting the amount they can borrow.
- This enables the central bank to control the flow of credit in the economy, affecting inflation, consumption, and investment.
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संबंधित प्रश्न
Which of the following is a selective/qualitative method of credit control.
Observe the relationship of the first pair of words and complete the second pair.
Quantitative method of credit control by the central bank : Bank rate.
Quantitative method of credit control by the central bank :
Define the following term:
Margin Requirements.
Briefly explain the following credit control methods adopted by the Central Bank.
Moral persuasion
The Central Bank is the apex monetary institution of the country. Explain its role of a custodian of foreign exchange reserves.
What is this policy called that controls the credit supply in an economy?
Identify the following Credit Control measure undertaken by the Central Bank during inflation.
The Central Bank sells government approved securities to the public.
What do you mean by credit control?
What is meant by Legal Reserve Ratio?
Describe two quantitative credit control measures of the Central Bank.
