Explain the direct action adopted by the central bank.

1.	Explain the direct action adopted by the central bank.
Answer» Direct action is adopted by the central bank when commercial banks do not follow the methods and polices suggested by the central bank and issued by it from time to time. In such, an event, it has legal right to take direct action. In direct action, the central bank may refuse rediscounting of bills, or charge a huge rate of interest on it. In this way, commercial banks have to start following the norms suggested by the Central Bank.

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