Meaning of Rationing od credit, direct …
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Yogita Ingle 6 years, 7 months ago
The Credit Rationing is a measure undertaken by the central bank to limit or deny the supply of credit based on the investor’s creditworthiness and an increased loan demand.
Moral suasion is a mixture of both persuasion and pressure. The central bank makes an attempt to persuade commercial banks to follow its directives of monetary policy or it can pressurise them to follow its policy directives. When it fails to work, the central bank can use direct action which includes non-recognition of a commercial bank .
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