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Which of the following tools is used by RBI for selective credit control?
  • a)
    It advises banks to lend against certain commodities.
  • b)
    It advises banks to recall the loans for advances against certain commodities.
  • c)
    It advises banks to charge higher rate of interest for advance against certain commodities.
  • d)
    It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.
  • e)
    None of these
Correct answer is option 'A'. Can you explain this answer?
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Which of the following tools is used by RBI for selective credit cont...
Selective credit control is a tool in the hands of Reserve Bank of India to restrict bank finance against sensitive commodities like food grains, cotton textiles, oilseeds, gur, etc. All these commodities are for mass consumption and the government makes all efforts to ensure adequate supply of these commodities in the free market. The policy, therefore, is to discourage advances against these commodities as far as possible and the purpose is achieved through 'Selective Credit Control'.
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Which of the following tools is used by RBI for selective credit control?a)It advises banks to lend against certain commodities.b)It advises banks to recall the loans for advances against certain commodities.c)It advises banks to charge higher rate of interest for advance against certain commodities.d)It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.e)None of theseCorrect answer is option 'A'. Can you explain this answer?
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Which of the following tools is used by RBI for selective credit control?a)It advises banks to lend against certain commodities.b)It advises banks to recall the loans for advances against certain commodities.c)It advises banks to charge higher rate of interest for advance against certain commodities.d)It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.e)None of theseCorrect answer is option 'A'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Which of the following tools is used by RBI for selective credit control?a)It advises banks to lend against certain commodities.b)It advises banks to recall the loans for advances against certain commodities.c)It advises banks to charge higher rate of interest for advance against certain commodities.d)It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.e)None of theseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following tools is used by RBI for selective credit control?a)It advises banks to lend against certain commodities.b)It advises banks to recall the loans for advances against certain commodities.c)It advises banks to charge higher rate of interest for advance against certain commodities.d)It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.e)None of theseCorrect answer is option 'A'. Can you explain this answer?.
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