Central bank as a credit controller: It is the most important function of central bank. By controlling the credit effectively, central bank establishes stability not only in the internal price level but also in the foreign exchange rate and full employment.
This function helps to meet some definite objectives such as price stability, economic growth, exchange rate stability etc. These objectives are achieved by regulating money supply. It includes two types of measures :
(i) Quantitative measures : It includes Bank rate, Repo rate, Open Market Operations (omo), CRR, SLR etc.
(ii) Qualitative measures : It includes moral suasion, margin requirement, direct actions etc.