Q118
Indian EconomyMoney, Banking & Financial Institutions
The main focus of selective credit controls used by the Reserve Bank of India to control credit is on
- a.credit for production and transportation of exportables.
- b.credit for production and transportation of consumables.
- c.credit for hoarding of goods in short supply and speculation in the market for such goods.
- d.credit for production and transportation of hardwares.
Answer: (C) credit for hoarding of goods in short supply and speculation in the market for such goods.
Selective (qualitative) credit controls such as margin requirements and credit ceilings are aimed at stopping bank credit from financing hoarding and speculation in sensitive commodities in short supply. They are not meant to restrict credit for normal production or transport of goods.