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CENTRAL BANK AND MONETARY POLICY

 

Contents1. Central BankReserve Bank of India2. Monetary Policy2.1. Definition of Monetary Policy2.2. Types of Monetary Policy2.3. Objectives2.4. Tools to Regulate Monetary Policy2.4.1. Quantitative Credit Control Methods2.4.2. Qualitative Credit Control Methods2.5. Limitations of Monetary Policy2.6. Revision of Monetary Policy in India2.7. Monetary Policy Committee (MPC)growth, and to meet the challenge of an increasingly complex economy, RBI would operate a Monetary Policy Framework.Composition of MPCFunctions of MPC2.8. Latest DevelopmentsUrjit Patel Committeemonetary policy committee (MPC).Concerns regarding Urjit Patel Committee Recommendations2.9. Miscellaneous2.9.1. Monetary Policy vs. Fiscal Policy, Monetary-Fiscal Policy Mix2.9.2. Inflation vs. Growth Tradeoff in Monetary Policy2.9.3. Some Recent Terms2.9.4. Marginal Cost of Funds Based Lending Rate (MCLR)3. GS Mains Test Series Questions1. In the context of Indian Economy, it is said that there are three macro-economic challenges -- managing growth inflation, mitigating vulnerability of the external factors and managing the political economy of fiscal consolidation. Discuss.Answer:2. What do you understand by Monetary Policy Trilemma? How can it be resolved in Indian context?Answer:3. Monetary policy transmission in India has largely remained ineffective. What are the reasons behind this? Explain what marginal cost-based lending rate (MCLR) is and how it can affect monetary policy transmission in India.Answer:4. Examine the causes of rupee depreciation and its impact on the Indian economy. Also discuss the steps taken by the Government and RBI to stem its slide.Answer:Impact of rupee depreciation:Steps taken up by RBI and Government:5. RBI has recently classified some banks as 'Domestic Systemically Important Banks' (D- SIBs). What is the rationale behind this move? Examine the possible implications of this step.Answer:4. Previous Years UPSC GS Mains Questions