Which one of the following is not an instrument of selective credit control in India ?

Selective credit control (SCC) refers to qualitative tools used by the RBI to direct credit to or away from specific sectors. Textbooks list margin requirements and rationing/ceilings on advances explicitly as SCC instruments, showing SCC’s focus on targeted credit restrictions rather than economy-wide measures [1]. Parliamentary/official sources enumerate SCC tools as minimum margins, credit ceilings and minimum interest charges on advances to sensitive commodities, reinforcing that SCC works via qualitative, commodity- or sector-specific actions [2]. In contrast, reserve ratios (like CRR/required reserve ratio) are broad, legal quantitative tools applicable to all banks to control overall liquidity, not selective credit allocation; hence “variable (reserve) ratios” are not an SCC instrument [3].

Sources

1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Qualitative Instruments of Credit Control > p. 170
2. [2] https://rsdebate.nic.in/bitstream/123456789/189465/1/PQ_166_10031993_U1629_p343_p343.pdf
3. [3] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 3: Money and Banking > 3.3.2 Limits to Credit Creation and Money Multiplier > p. 40