Explanation:

The Central Bank plays a crucial role in regulating and controlling the credit supply in an economy. It uses various tools to achieve this objective. One such tool is the measure of credit control, which includes moral suasion, issue of directives, and direct action.

Moral Suasion:
Moral suasion is an informal method used by the Central Bank to influence the commercial banks and financial institutions to follow certain credit policies. The Central Bank communicates with the banks, through meetings, discussions, and public statements, to persuade them to adopt certain credit control measures. This method relies on the cooperation and goodwill of the banks, as there are no legal obligations involved.

Issue of Directives:
The Central Bank has the authority to issue directives to the commercial banks and financial institutions regarding their lending practices. These directives are formal instructions that the banks are legally bound to follow. The Central Bank can set limits on the maximum amount of credit that can be extended, specify the sectors to which credit should be directed, and impose restrictions on certain types of loans. By issuing these directives, the Central Bank can directly control the credit supply in the economy.

Direct Action:
In case the moral suasion and issue of directives are not effective in controlling credit, the Central Bank can resort to direct action. Direct action involves using the regulatory powers of the Central Bank to impose penalties, increase the reserve requirements, or change the interest rates. These actions directly impact the liquidity and profitability of the banks, influencing their lending behavior and credit supply.

Conclusion:
All of the above-mentioned measures, moral suasion, issue of directives, and direct action, are used by the Central Bank as measures of credit control. These tools allow the Central Bank to influence the lending behavior of commercial banks and financial institutions, thereby regulating the credit supply in the economy.