Effectiveness of Monetary Policy in India: The Interest Rate Pass-Through Channel

Rajan, Ramkishen S.; Yanamandra, Venkataramana

doi:10.1057/9781137534149_2

Cited by 4 publications

(1 citation statement)

References 7 publications

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“…In addition, the speed and extent to which changes in bank funding costs are passed on to customers is of interest to regulators in their quest to ensure a more efficient, responsive and inclusive banking system (RBI, 2015;Singh, 2017;Wang & Lee, 2009). Prior research of this genre either utilises time-series data to discern the impact of a monetary policy change on bank-level variables (Aleem, 2010;Barnett et al, 2016;Khundrakpam, 2011;Rajan & Yanamandra, 2015;Ray & Prabhu, 2013;Salunke & Patnaik, 2018;Singh, 2011) or utilises annual longitudinal data to analyse the extent of monetary pass-through to interest rates and bank lending (Ghosh, 2006;Pandit et al, 2006). These studies exhibit several shortcomings.…”

Section: Introductionmentioning

confidence: 99%

Monetary Policy Pass-through, Ownership and Crisis: How Robust is the Indian Evidence?

Ansari

Ghosh

2021

Margin: The Journal of Applied Economic Research

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Employing disaggregated data for 2001–2016, this study investigates the lending and loan pricing behaviour of state-owned and domestic private banks in response to monetary policy. Three major findings emerge. First, although both the interest rate and the bank lending channels are relevant for monetary pass-through, there is a trade-off: the impact of the former is much higher than the latter, although it occurs with a significant lag. Second, domestic private banks have a far greater response to a monetary policy shock under the interest rate channel, whereas state-owned banks display a greater response under the bank-lending channel. And finally, state-owned banks cut back lending during periods of crises, although no such response is manifest in domestic private banks. JEL Codes: C23, D4, E43, E52, G21, L10

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Section: Introductionmentioning

confidence: 99%

Monetary Policy Pass-through, Ownership and Crisis: How Robust is the Indian Evidence?

Ansari

Ghosh

2021

Margin: The Journal of Applied Economic Research

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Does bank competition affect the transmission mechanism of monetary policy through bank lending channel? Evidence from India

Rakshit

Bardhan

2023

Journal of Asian Economics

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Financial development, interest rate pass-through and interest rate channel of monetary policy

Oyadeyi

2023

Cogent Economics & Finance

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Effectiveness of Monetary Policy in India: The Interest Rate Pass-Through Channel

Cited by 4 publications

References 7 publications

Monetary Policy Pass-through, Ownership and Crisis: How Robust is the Indian Evidence?

Monetary Policy Pass-through, Ownership and Crisis: How Robust is the Indian Evidence?

Does bank competition affect the transmission mechanism of monetary policy through bank lending channel? Evidence from India

Financial development, interest rate pass-through and interest rate channel of monetary policy

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