Limitations of Monetary Measures in curbing inflation:

(i) It is not much successful if the inflation is caused due to cost-push factor.

(ii) Another issue, which is important in a country like India, is the large presence of unorganized banking. Because of this RBI is not able to control a large part of the banking sector in the economy.

(iii) High interest rate to curb inflation has the effect of throttling the flow of credit to the productive sectors of the economy. As a result, the economic growth may have to be compromised. This has been the persistent problem in Indian economy in the last few years.