Monthly Archives: October 2015

Quantitative tools of credit control –Variable reserve ratio

This method was first suggested by Lord J M Keynes, as a method of credit control by the central bank. With excessive reserves kept by the banks , the two traditional weapons – bank rate policy and the policy of

Posted in General Economics

Quantitative tools of credit control –Open market operation operations

This method of credit control developed after the First World War. OMO refers to buying and selling of government securities and other eligible paper like bills and securities of private concerns by the central bank in the open market. PURCHASE

Posted in General Economics

Quantitative tools of credit control – The bank rate or the discount rate

The bank rate is the earliest method of credit control which was used by bank of England till the outbreak of the First World War. Bank rate’ is also referred to as ‘discount rate’, “is the rate of interest which

Posted in General Economics

Quantitative tools of credit control – Measures of credit control – Meaning

Credit control measures refer to the measures adopted by the central bank to control the cost, availability, volume, direction and purpose of credit /money supply in the economy. In India the control of credit is done with the help of

Posted in General Economics

Conclusion

Thus the central bank performs dynamic and unique functions and promotes the economic development of the country. In developed countries, the regulatory functions get higher priority. In developing countries, the Central Bank plays both regulatory as well, as developmental and

Posted in General Economics

Functions of central bank – Data collection and publicity

The central bank also collects and publishes statistical data and economic information through its research department. It compiles data on the working of the commercial and cooperative banks, on balance of payments, Government finances, security markets, price trends and credit

Posted in General Economics

Functions of central bank – Developmental and Promotional functions

Besides the traditional functions performed by the central bank, the central bank especially in developing countries like India has to assist the Government in the development and promotion of the economy. Such functions include a] to promote banking habits among

Posted in General Economics

Functions of central bank – Controller of credit or money supply in the economy

The chief objective of a central bank is to maintain level of prices and thereby stability in the value of money.for this the central bank has to control and regulate the volume and use of credit. Credit control is generally

Posted in General Economics

Functions of central bank – Custodian of foreign exchange reserves of the country and maintenance of exchange rate stability

The central bank acts as a custodian of the country’s gold and foreign exchange reserves like the U S Dollars, Japanese Yen, British Pound etc, obtained by the government and in the international trade. A country maintains foreign exchange reserves

Posted in General Economics

Functions of central bank – Bankers bank

The central bank supervises co-ordinates and controls the operations and activities of the commercial banks. In order to do so it undertakes the following functions. a] Custodian of cash reserves It is mandatory for all commercial banks have to keep

Posted in General Economics