Bank Lending Channel: The Role and Effectiveness of Benchmark Interest Rates

  • D Anil Raj Research Scholar, Research and Development Centre, Bharathiar University, Coimbatore, Tamil Nadu, India
  • N Ajithkumar Professor, Amritha School of Arts & Science, Kerala, India
Keywords: benchmark lending rate, monetary policy transmission mechanism, base rate, marginal cost

Abstract

Since the deregulation of Bank interest rates in India, to make the credit pricing more transparent, Banks were asked to declare a reference benchmark rate for lending around which they should normally lend. This article briefs the history of benchmark lending rates of Banks, various methodologies used and its effectiveness in transmitting the monetary policy rate.

Published
2017-12-23
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How to Cite
Anil Raj, D., & Ajithkumar, N. (2017). Bank Lending Channel: The Role and Effectiveness of Benchmark Interest Rates. Shanlax International Journal of Economics, 6(1), 63-71. Retrieved from https://shanlaxjournals.in/journals/index.php/economics/article/view/710
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Article