Monetary Transmission Subject: Economy Context: Data collected from banks by the RBI suggests the share of outstanding loans linked to external benchmarks — mostly the repo rate which is at 4 per cent — increased from as low as 2.4 per cent during September 2019 to 28.5 per cent during March 2021 Concept: […]

Subject: Economy Context : Banks with higher capital ratios transmit monetary policy actions more smoothly than banks with lower capital base according to recent study by RBI . Concept : The RBI study attempts to understand the link between bank capital and monetary transmission by looking at the relationship between bank capital and loan growth/cost […]

Subject: Economy Context :High incidence of non-performing assets (NPAs) in banks acts as a major roadblock in transmission of monetary policy actions of the Reserve Bank, a working paper prepared by the officials of the central bank said. Concept : The working paper also made a strong case for capital injection in state-owned banks, arguing […]