Multiple choice

Directed credit means

  1. Government directs the channel of flow of funds to identified sectors of the economy

  2. The Board of director issues to directions to the branch managers of the banks to follow a certain credit policy

  3. Credit given in geographical direction to ensure proper flow of funds geographically

  4. Directions given by political leaders to give loans to their close relatives
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A Correct answer
Explanation

Directed credit refers to government policies that require banks to lend a specific portion of their funds to priority sectors, such as agriculture or small-scale industries.

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