What are the Instruments of Credit Control?

Answer: The Reserve Bank of India uses credit control as a key tool in its monetary policy to manage the demand for and supply of money, or liquidity, in the economy. The central bank or RBI governs the credit that commercial banks extend. The RBI employs this strategy to promote both economic development and national stability.

It implies that banks would curb not only inflationary trends but also stimulate economic growth, which will eventually result in a rise in the stability of real national income.  Because of its duties as a note-issuer and keeper of cash reserves, the RBI does not regulate credit because doing so would cause social and economic instability in the nation.