Question

    Which among the following is incorrect about Moral

    Suasion?
    A RBI may request commercial banks to not to give loans for unproductive purpose Correct Answer Incorrect Answer
    B It is a credit control method of the RBI Correct Answer Incorrect Answer
    C It is a qualitative tool of credit control Correct Answer Incorrect Answer
    D It can be used by Ministry of finance Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Moral suasion : This method is generally used when quantitative methods are less effective. Under this method, the central bank persuades the commercial banks to advance credit as per the directions of central bank and to comply with the general monetary policy of central bank.

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