Define or Explain the following concepts. 4. Moral suasion

Define or Explain the following concepts.

4. Moral suasion

Answer: 

4. A persuasion technique followed by the central bank to pressurise the commercial banks to abide by the monetary policy is termed as moral suasion. This involves meetings, seminars, speeches and discussions, which explain the present economic scenario and thereby persuade the commercial banks to adapt the changes needed.

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