LAND UTILIZATION Land is a scarce resource, whose supply is fixed for all practical purposes. At the same time, the demand for land for various competing purposes is continuously increasing with the increase in human population and economic growth.Land use pattern at any given time is determined by several factors including size of human and livestock population, the demand pattern, the technology in use, the cultural traditions, the location and capability of land, institutional factors like ownership pattern and rights scale regulation. Major Types of Land Utilization in India : As in all other countries, land in India is put to various uses. The utilization of land depends upon physical factors like topography, soil and climate as well as upon human factors such as the density of population, duration of occupation of the area,land tenure and technical levels of the people.There are spatial and temporal difference in land utilization due to the continued interplay of phys...
METHODS OF CREDIT CONTROL
The methods of credit control can be classified into two categories :
a)Quantitative or general methods
b)Qualitative or selective methods
Quantitative or general methods
a)Bank rate policy : The bank rate or discount rate is rate at which a central bank is prepared to discount the first class bills of exchange.The rate of interest which the central bank charges from the commercial banks for rediscounting the bills is called bank rate.
Bank rate policy aims at influencing
-the cost and availability of credit to commercial banks.
-interest rates and money supply in economy
-level of economic activity f the economy.
A rise in bank rate makes credit costlier,reduces the volume of credit ,discourages economic activity and brings doen price level in the Economy.A fall in bank rate makes credit cheaper ,increases volume of credit,encourages business man to borrow and invest and increases the levels of economic activity and price level.
b)Open market operations : Open market operations refer to deliberate and direct buying and selling of securities in money market by Central Bank. In narrow sense, It refers to purchase and sale by Central Bank of government securities in money market . In broader sense,Open market operations imply purchase and sale by Central Bank of any kind of eligible paper like government securities,bills and securities of private concerns etc.
c)Cash reserve ratio : The method of cash reserves ratio is more direct and more effective method in dealing with abnormal situation,when there are excessive reserves with the commercial banks on the basis of which they are creating too much credit ,leading to inflationary situation. Changes in cash reserves ratio is powerful method for influencing not only the volume of excess reserves with the commercial banks but also the credit multiplier of banking system.A change in reserve requirements affect the money supply in two ways :
-it changes the level of excess reserves
-it changes the credit multiplier.
Qualitative or selective methods
a)Marginal requirements : Control over Marginal requirements means control over down payments that must be made in buying securities on credit.The Marginal requirement is the difference between the market value of security and it's maximum loan value.An increase in Marginal requirements will reduce the amount that can be borrowed for the purchase of a security.
b)Regulation of consumer credit : A certain percentage of price of durable goods is paid by the consumer in cash under this method. The balance if financed through the bank credit which repayable by consumer in instalments . The central bank can control the consumer credit -
-by changing the amount that can be borrowed for purchase of consumer durables
-by changing maximum period over which instalments can be extended.
c)Rationing of credit : Credit Rationing is method of Controlling and regulating the purpose for which credit is granted by commercial banks.It has two forms :
-central bank may give its rediscounting facilities for any particular bank.
-Central bank may fix minimum ratio regarding capital of commercial bank to its total assets.
d)Moral suasion : Moral suasion means advising ,requesting and persuading the commercial banks to cooperate with central bank in implementing it's general monetary policy. Through this ,central bank merely uses its moral influence to make the commercial bank to follow its policies.
e)Publicity : The central banks also use Publicity as method of credit control.through this,central bank seeks -
-to influence credit policies of commercial banks
-to educate people regarding economic and monetary condition.
-to influence public opinion in favour of its monetary policy.
The central banks regularly publish statement of their assests and liabilities,review of credit and business condition,report on their own activities etc.
f)Direct action :Direct action refers to the directions issued by the central bank to commercial bankd regarding. Their lending and investment policies. Direct action may take different forms :
-central bank may refuse to rediscounting the bills of exchange of commercial bankd whose credit policy is not in line with general policy of Central bank.
-Central bank may charge a penalty rate of interest over and above babk rate on money demanded by the bank beyond the prescribed limit.
-Central bank may refuse to grant more credit to banks whose borrowings are found to be in excess of their capital and reserves.
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