. How does RBI control credits ?OR – InterviewSolution

1.	. How does RBI control credits ?OR
Answer» WhenRBIbuys government securities the volume ofcreditincreases and when securitiesaresold the volume ofcreditdecreases. When commercial banks make payment to theRBIfor securities bought, their cash reserves reduce which leads to a reduction in their ability to createcredit.

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