As per the RBI act 1934 and the Banking Regulation Act 1949 RBI has been empowered to adopt credit control measure for proper regulation of the volume of credit credit control measure are of two types i. e . quantitative control and qualitative control while the quantitative control are trying to control the volume of credit in selective Manner
some of the credit control measures adopted by RBI are as follows
- bank rate :-by adopting a variation in the bank rate by RBI is trying to influence the interest rate charged by the commercial bank on its lending
- open market operation:- the RBI has also been and power to buy and sell short-term commercial bill and securities West to control the volume of credit
- cash reserve ratio:- the variation in the cash reserve ratio is another method of credit control by RBI act 1934 the commercial bank have to keep certain minimum cash reserve with the RBI
- selective credit control:- as per the Banking Regulation Act 1949 by RBI is empowered to control credit on qualitative ways i. e. is on a selective manner accordingly the SCC was the first introduced in 1956 The flow of credit selectively since 1993-94 the RBI adopted Stricter SCC. Accordingly, stricter controls have been imposed on six Board of group of commodity these include food grain sugar oilseed cotton vegetable oil and cotton textile.
