RBI has requested commercial banks not to give loans for unproductive purpose which does not add to...........

Economic and Social Issues Monetary and Fiscal Policy

RBI has requested commercial banks not to give loans for unproductive purpose which does not add to economic growth but increase inflation.

Which of the following tools of monetary policy has been used by RBI in the above given situation?

Open Market Operations

Credit Rationing

Moral Suasion

Direct Action

None of the options given above

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Explanation:

Moral Suasion is just as a request by the RBI to the commercial banks to take certain actions and measures as per the trend of the economy. RBI may request commercial banks not to give loans for unproductive purpose which does not add to economic growth but increases inflation.