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Define or Explain the following concept. Moral suasion - Economics

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Question

Define or Explain the following concept.

Moral suasion

Short Note

Solution

A persuasion technique followed by the central bank to pressurise the commercial banks to abide by the monetary policy is termed as moral suasion. This involves meetings, seminars, speeches and discussions, which explain the present economic scenario and thereby persuade the commercial banks to adapt the changes needed.

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Definition - Central Bank
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Chapter 13: Central Banking - Exercise 2 [Page 121]

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Micheal Vaz Economics [English] 12 Standard HSC
Chapter 13 Central Banking
Exercise 2 | Q 1.4 | Page 121

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