Q.Explain the quantitative (general) methods of credit control used by the Reserve Bank of India.

RBI is the Reserve Bank of India, the central bank of the country, set up in 1935. It is the highest monetary authority, which issues currency, acts as banker to the government and to commercial banks, keeps the nation's foreign-exchange reserves and controls credit through monetary policy.

Meaning

RBI stands for the Reserve Bank of India. It is the central bank of India, established in 1935, and is the supreme monetary and banking authority of the country. Being the central bank, it does not deal directly with the general public but regulates and controls the entire banking and monetary system.

Main functions of the RBI

• Issue of currency notes: The RBI has the sole right to issue currency notes in the country (except one-rupee notes and coins issued by the government).
• Banker to the government: It keeps the accounts of the central and state governments, makes payments on their behalf and manages public debt.
• Banker to banks (bankers' bank): It keeps the reserves of commercial banks, acts as lender of the last resort and clears their mutual claims.
• Custodian of foreign-exchange reserves: It maintains the country's foreign-exchange reserves and manages the external value of the rupee. …