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What is meant by Margin Requirement? How does the Central Bank use this
measure to control deflationary conditions in an economy?

Simmi, the answer provided by Suhasi for margin requirement is correct. In order to learn how it affects credit flow in an economy, follow the below link (under the topic- Qualitative Measures).

https://www.meritnation.com/cbse/class12-commerce/studymaterial/economics/introductory-macroeconomics/money-and-banking/341_1988_5842#slide5_functions-of-reserve-bank-of-india-and-instruments-of-monetary-policy


Thumbs-up to Suhasi yes

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Margin Requirement is the difference between the value of collateral security and the loan granted by the bank.


example
suppose the value of collateral security is 1 crore and the loan granted by the bank is 80 lakh so the remaining 20 lakh is the margin requirement to the bank.
 
 
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