Selective Credit Control Methods

Selective credit control methods are the various tools used by the central bank to control the flow of credit in the economy. These methods are used to regulate the credit availability and to ensure that the supply of money in the market is in line with the overall economic goals. Some of these methods are:

1. Rationing of Credit
Rationing of credit is a method of credit control in which the central bank determines the amount of credit that can be given to a particular sector or industry. This method is used to control the credit availability in the market.

2. Direct Action
Direct action is a method of credit control in which the central bank takes direct action to restrict credit availability. This can be done by imposing certain restrictions on the lending activities of commercial banks or by increasing the interest rates.

3. Change in Margin Requirements
Margin requirements refer to the amount of money that a borrower needs to deposit as collateral while taking a loan. A change in margin requirements is a method of credit control in which the central bank can increase or decrease the margin requirements to regulate the flow of credit.

4. Reserve Requirement Changes
Reserve requirement changes refer to the amount of money that commercial banks need to keep with the central bank. This method of credit control is used to regulate the amount of money that is available for lending in the market.

Answer Explanation
Out of the given options, the correct answer is option D, i.e., Reserve Requirement Changes. This is because reserve requirement changes are not a selective credit control method as they do not target any specific sector or industry. Instead, they regulate the overall credit availability in the market.