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What is moral suassion?

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What is moral suassion?

Posted by Ayush Mishra 5 years, 2 months ago

CBSE > Class 12 > Economics

2 answers

Lovely Dhawan 5 years, 2 months ago

Sometimes the central bank makes the member of the commercial bank agree through its pressure to follow its directives.n the commercial banks generally do not ignore the advice of the commercial bank.the central bank afvice them to restrict the loans during inflation and be liberal in lending while granting the loans

Gaurav Seth 5 years, 2 months ago

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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