Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the search-in-place domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /usr/www/users/mywaecf/KEYPOINT/wp-includes/functions.php on line 6121

Warning: session_start(): Cannot start session when headers already sent in /usr/www/users/mywaecf/KEYPOINT/wp-content/plugins/secure-copy-content-protection/public/class-secure-copy-content-protection-public.php on line 1000

Warning: Cannot modify header information - headers already sent by (output started at /usr/www/users/mywaecf/KEYPOINT/wp-includes/functions.php:6121) in /usr/www/users/mywaecf/KEYPOINT/wp-content/plugins/docket-cache/includes/src/Plugin.php on line 1186

Warning: Cannot modify header information - headers already sent by (output started at /usr/www/users/mywaecf/KEYPOINT/wp-includes/functions.php:6121) in /usr/www/users/mywaecf/KEYPOINT/wp-content/plugins/docket-cache/includes/src/Tweaks.php on line 453
CONTROL OF COMMERCIAL BANKS BY THE CENTRAL BANK — Economics Keypoint

CONTROL OF COMMERCIAL BANKS BY THE CENTRAL BANK

Central bank controls commercial banks through the following ways:

  1. Open Market Operations– This is where government securities are sold and bought. E.g. Treasury Bills. This device helps the central bank to increase or decrease the volume of money in circulation. If the central bank wants to increase the amount of money in circulation, it will embark on buying of securities from the commercial banks and the public. But if there is too much money in circulation, the central bank will embark on selling of securities to the commercial banks and the general public, payment of which will reduce the amount of money in circulation.
  2. Bank rate – This is the minimum lending rate at which central bank rediscounts first class bills.
  3. Treasury Directives – The central bank gives instruction to the commercial banks to reduce the amount of loans they grant to the public or at times may call for special deposits.

Leave a Comment

not allowed!