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Selective Measures, the second point. That is the second module in this, students. Issue of Directives, issue of directives goes something like this. Directives are usually in the form of oral or written statements, right. Some direction is given, some notices are given, some instructions are given or appeals, warnings, particularly to curb individual credit structures and to restrain the aggregate volume of loans. There is no money, why, goods are not there. Then what will you do with the money? Agreed, that is why directives, to curb the flow of credit, to ensure that the money goes only in desirable sectors. When there is a lot of money then it goes in speculation, it goes in share market. Then speculation happens. There is no supply of goods. Then what is the use? There is only an artificial happiness in mind that my share prices have gone up, brother, there are no onions and potatoes in the country. So, what we will do? Agreed, directives, it can be oral or written.

Credit Rationing, means ration your money, think about money where you should give your money, only in share market? No, pay to all the sectors. Money should be for the overall development of the country. Not only for the development of one market, child. My body every part of the body is important. In the same manner in the country agriculture, industrial, treasury, export sector all are important and therefore all should get sufficient finance, okay. See, what it says, controlling and regulating the purpose for which the credit is granted or allocated by commercial banks.

Example: Of the total loans given, contribute money to primary sector, it is very important, child. Why? If the primary sector doesn’t develop people will not get food to eat. If Madhya Pradesh is empty then Uttar Pradesh will not work, my son. That is why, first agricultural sector. Secondary sector, service sector, give your contribution of credit to everybody, also foreign sector25%. This will ensure what balanced development of all sectors, proper development of the country, agreed.

MCQs, 1- Rationing of credit is a selective method.

  1. Central bank issue directive in the form of oral as well as written, both.
  2. Which of these is not a credit control policy? Bank rate.
  3. Identify the selective instruments used by RBI for controlling credit. All of the above.

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2017-04-18T04:56:14+00:00 Categories: Uncategorized|Tags: , , , |0 Comments
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