This is the most crucial function played by any central bank in the modern times. Central Banks are supposed to regulate and control the volume and direction of the credit by using the:
(i) Quantitative techniques- are those techniques which influence the quantutm of credit in the economy like open market operations, bank rate policy, repo and reserve repo rate policy etc.
(ii) Qualitative techniques- or selective credit control techniques are the ones which influence the direction of credit in the economy like margin requirements and moral suasion.
