Qualitative and quantitative monetary policy tools of RBI including Repo, Reverse Repo, CRR, SLR.

1. Monetary Policy Instruments of RBI
MSS (i)Credit
rationing
(ii)Credit
ceiling
(iii)Credit
authorization
(iv) Directives
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(LAF: Liquidity Adjustment Facility)

2. Qualitative instruments or tools of RBI
2

3. Qualitative instruments or tools of RBI
3

4. Qualitative instruments or tools of RBI
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5.  Directives – regarding loan advances to crops & fixing lending rates.
 Fixation of margin requirements
 Credit rationing – to ensure overall development
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Qualitative instruments or tools of RBI

6. Quantitative instruments or tools of RBI
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7. Quantitative instruments or tools of RBI
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8. Quantitative instruments or tools of RBI
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9. Quantitative instruments or tools of RBI
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10. Repo rate is the rate at which the RBI lends
to commercial banks by purchasing securities
while bank rate is the lending rate at which
commercial banks can borrow from the RBI
without providing any security.
Repo rate Vs. bank rate
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11. Quantitative instruments or tools of RBI
11

12. Current rates (as of July 2023) of key RBI indicators:
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To control inflation RBI will follow dear or contractionary
monetary policy to reduce money supply in the economy.
It will increase reserve ratios (CRR,SLR), sell government
securities under OMOs or raise various rates such as
REPO, MSF, Bank rates, etc.

13. Impact of RBI’s monetary policy instruments:
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