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Credit control - the central bank it is a matter of...

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Credit control: Commercial bankers are profit making agencies. For them creation and supply of credit is a source of profits. The total credit money supply is much in excess and a certain multiple of the cash deposits that they possess. Therefore commercial banks are likely to run into difficulties whenever their depositors suddenly increase demand for money. If the bankers are unable to satisfy the needs of their depositors then they are likely to fail and go bankrupt. But for
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Unformatted text preview: the central bank it is a matter of prestige that every bank should operate successfully and come over its difficulties. Therefore the central bank keeps a severe control on the credit supply activities of the banks. In order to achieve its goals the central bank uses two devices. These are quantitative and qualitative methods of credit control....
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