Central Bank controls the credit supply in an economy and this policy is called Credit Control.
(i) Cash Reserve Ratio : To control inflation, the central bank raises the CRR which reduces the lending capacity of the commercial banks. Consequently, flow of money from commercial banks to public decreases. In the process, it halts the rise in prices to the extent it is caused by banks credits to the public.
(ii) Statutory Reserve Ratio : Statutory Liquidity Ratio ( SLR) refers to the amount maintained by commercial banks with themselves in the form of gold and government securities before lending or before giving credit to any of their customers. As SLR effect the money supply situation in economy which inturn affect the inflation of the economy. Higher SLR , means bank can give less money as loan = Higher interest rate = it becomes expensive to start a new factory, buy a new house / car/bike. This can curb inflation but may also lead to slowdown in economy, because people wait for the interest rates to go down, before taking loans.
