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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
Briefly explain two qualitative methods of credit control adopted by this institution.
Which of the following is a selective/qualitative method of credit control.
______ is a quantitative 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 :
Give any two reasons as to why a country needs a central bank.
State the impact of an increase in Cash Reserve Ratio on loanable funds.
Differentiate between quantitative and qualitative methods of credit control.
Which of the following statements are correct and which are incorrect? Give reasons.
- Central bank is a currency authority.
- Bank rate is a qualitative method of credit control.
- Quantitative methods regulate direction of credit.
- Bank rate is the rate at which commercial banks give loans to the public.
- Central bank should sell government securities when credit is to be expanded.
What do you mean by credit control?
What are quantitative methods of credit control?
