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Quantitative and Qualitative Credit Control




Qualitative Credit Control of RBI

  • Credit control means control over the quantity and value of credit in the country. Among the functions of Central Bank, one main function is to control and regulate the credit in the country. In India, this function is performed by the Reserve Bank.
  • The measures of credit control can be divided into two types:

    1. Quantitative Credit Control.
    2. Qualitative Credit Control.

  • The main objective of quantitative credit control is to establish control over the total quantity of credit in the country.

Important Points

  • For quantitative credit control, the Central Bank takes the help of bank rate, open market operations, statutory liquidity ratio and cash reserve ratio, whereas publicity, rationing of credit, regulation of consumer credit, moral suasion, variation in margin requirements are the qualitative credit control methods.

  • Bank Rate: It is the rate at which the RBI extends credit to commercial banks.

  • Cash Reserve Ratio (CRR): A commercial bank is required to keep a certain percentage of its total deposits with the RBI in cash. It is called Cash Reserve Ratio.

  • Statutory Liquidity Ratio (SLR): It is that ratio/percentage of its total deposits which a commercial bank has to maintain with itself at any given point of time in the form of liquid assets like cash in hand, etc.

  • Repo Rate: The rate at which the RBI borrows from banks for a short term. An increase in the repo rate may be a precursor to an increase in the bank rate.

  • Reverse Repo Rate: The rate at which banks deposit their surplus short-term funds with RBI. If RBI increases reverse repo rate, commercial banks, in turn, tend to pass on the impact through their short-term lend rates to their customers.

Printing of Securities and Minting in India

  1. India Security Press (Nashik Road): Postal Material, Postal Stamps, Non-postal Stamps, Judicial and Non-judicial Stamps, Cheques, Bonds, NSC, Kisan Vikas Patra, Securities of State Governments, Public Sector Enterprise and Financial Corporations.

  2. Security Printing Press (Hyderabad): Established in 1982 for meeting the demand for postal material by Southern States. It also fulfils the demand for Union Excise Duty Stamps of the country.

  3. Currency Notes Press (Nashik Road): Since 1991, this press prints currency notes of Re.1, Rs.2, Rs.5, Rs.10, Rs.50, and Rs.100. (Earlier printing of Rs.50 and Rs.100 currency notes was not done here).

  4. Bank Notes Press (Dewas): Currency notes of Rs.20, Rs.50, Rs.100 and Rs.500 are printed here.

  5. Modernized Currency Notes Press: Two new modernized currency notes press are under establishment at Mysore (Karnataka) and Salboni (West Bengal).

  6. Security Paper: Hoshangabad (established in 1967-68) makes production of Bank and Currency notes paper.

  7. Coins are minted at four places: Mumbai, Kolkata, Hyderabad and Noida.

Quantitative and Qualitative Credit Control

Related Web Pages
Qualitative Credit Control in RBI |  Qualitative Credit Control Measures |  Bank Rate in India |  Bank Rate and Repo Rate |  Bank Rate of Interest |  Bank Rate of Interest in India |  Bank Rate Policy |  Cash Reserve Ratio CRR |  Cash Reserve Ratio India |  Cash Reserve Ratio in India |  Cash Reserve Ratio RBI |  Statutory Liquidity Ratio SLR |  Statutory Liquidity Ratio RBI |  Reverse Repo Rate RBI |  Reverse Repo Rate Current |  Reverse Repo Rate of RBI |  India Security Press Nasik |  Security Printing Press Hyderabad |  History of Indian Banking System |  History of Indian Banking Industry |  Growth of Banks in India |  Growth of Banking Industry |  Growth of Banking Sector in India |  Brief History of Indian Economy |  General Knowledge in Current Affairs |  Indian Economy Current Status |  Indian Economy Current Issues |  Indian Economy History |  Latest General Knowledge Questions |  General Knowledge about Current Affairs |  General Knowledge |  GK |  GK in India |  General Knowledge Questions |  General Knowledge India |  General Knowledge Test |  GK Quiz | 

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