Role of RBI in Credit Control

Abstract

As supreme banking authority in the country, the Reserve Bank of India has the powers to

hold the cash reserves of all the scheduled banks, to control the credit operations of banks through quantitative and qualitative controls, to control the banking system through the system of licensing, inspection and calling for information and it acts as the lender of the last resort by providing rediscount facilities to scheduled banks. Credit Control is a significant instrument used by RBI for monetary policy to control the demand and supply of money and to restrict the flow of credit in an economy. This paper highlights the role of the Reserve Bank of India in credit control.