Meaning of Credit Policy
- The credit policy is basically a plan of action executed by the Reserve Bank of India (RBI) on behalf of the Government of India to control and regulate the demand for and supply of money with the public and the flow of credit i.e. money into the economy.
- It refers to the use of credit policy instruments which are at the disposal of central bank to regulate the availability, cost and use of money and credit to promote economic growth, price stability, optimum levels of output and employment, balance of payments equilibrium, stable currency or any other goal of government’s economic policy.
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