Contents

1. Central Bank 58

1.1. Functions of a Central Bank 58

2. Monetary Policy 60

2.1. Definition of Monetary Policy 60

2.2. Types of Monetary Policy 61

2.3. Objectives 61

2.4. Tools to Regulate Monetary Policy 62

2.4.1. Quantitative Credit Control Methods 62

2.4.2. Qualitative Credit Control Methods 63

2.5. Limitations of Monetary Policy 64

2.6. Revision of Monetary Policy in India 65

2.7. Monetary Policy Committee (MPC) 65

2.8. Latest Developments 67

2.9. Miscellaneous 68

2.9.1. Monetary Policy vs. Fiscal Policy, Monetary-Fiscal Policy Mix 68

2.9.2. Inflation vs. Growth Tradeoff in Monetary Policy 69

2.9.3. Some Recent Terms 70

2.9.4. Marginal Cost of Funds Based Lending Rate (MCLR) 71

3. GS Mains Test Series Questions 72

4. Previous Years UPSC GS Mains Questions 78