Explain any two methods of credit control used by Central Bank.
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(1) Margin requirement a margin refers to the difference between market value of the security offered for loan and the amount of loan offered by the commercial banks . during inflation, supply of credit is reduced by raising the requirement of margin.
(2)Moral suasion it refers to moral pressure exercise by the central bank on the commercial bank to be restricted and selective in leading during inflation and to be liberal in leading during inflation . Generally, this measure is used as selective credit control instrument to channelise the flow of credit topritory area.
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