Government takes various steps to promote economic development of nation. Monetary policy is one of them. Monetary policy is an integral part of general economic policy of government. It influences supply of money, credit policy, and rate of interest. It also regulates the banking system, so as to meet credit needs of economy. It creates favorable environment for saving and investment.

1. MONETARY POLICY
Khushbu
Mba 1st year
Roll no.:170000502009
CH. BANSI LAL UNIVERSITY, BHIWANI

2. CONTENTS
 Introduction
 Objectives of monetary policy
 Measures of monetary policy
 Features
 Limitations
 Highlights
 Suggestions & Conclusions
 References

3. INTRODUCTION
• Monetary policy is formulated and executed by
Central Bank of the country to achieve specific
objectives.
• It controls :
(a) supply of money
(b)Cost of money or rate of interest, with a view to
achieve particular objectives.

4. OBJECTIVES OF MONETARY
POLICY
Objectives
Exchange
stability
Full
employment
and
maximum
output
Economic
growth
Price
stability
 To regulate money supply in the economy
 To attain price stability
 To promote economic growth
 To promote saving and investment
 To promote employment
 To continuously monitor global and
domestic financial conditions

5. Measures of monetary policy of india
RBI adopts
1. Quantitative credit control
2. Qualitative credit control

6. Quantitative credit control
 Bank rate
 Statutory Liquidity Ratio(SLR)
 Open Market Operations
 Cash Reserve Ratio(CRR)
 Repo Rate
 Reverse Repo Rate
 Marginal Standing Facility(MSF)

7. Qualitative Credit Control
1) Change in margin requirements on loans
2) Credit Monitoring Arrangements
3) Direct Action
4) Ceiling on Loans

8. FEATURES OF MONETARY POLICY OF
RESERVE BANK OF INDIA
1. Active policy
2. Controlled Money Supply
3. Seasonal Variations
4. Flexible
5. Investment and Saving Oriented
6. Wide Range of Methods of Credit Control

9. LIMITATIONS OF MONETARY POLICY:
1) Limited scope of monetary policy in economic
development
2) Limited role in controlling inflation
3) Poor banking habits
4) Existence of Black Money
5) Poor Implementation

10. HIGHLIGHTS OF THE SECOND BI-
MONTHLY MONETARY POLICY FOR 2017-18
AS ANNOUNCED BY RBI
 Repo rate unchanged at 6.25%
 Reverse repo rate unchanged at 6%
 SLR cut by 0.5% to 20%
 Growth forecast for 2017-18 lowered to 7.3% from 7.4%
 Inflation projected at 2-3.5% for H1,3.5-4.5% for H2,FY18.
 GST roll out not to have material impact on inflation.
 7th pay commission allowances, geo political, financial risk
pose upside risk to inflation.
 RBI to work with govt. to address stress in bank balance sheet.

11. SUGGESTIONS & CONCLUSION:
• Price Stability
• Flexible Rate of Interest
• Monetary Targeting
• Proper Implementation
 Monetary policy must accommodate primary supply
shocks and then curb secondary effects. The primary
aim of monetary policy should be targeting stability.
 RBI is the prime facie authority (along with the GOI)
plays a crucial role in formulating the monetary
policies. It can shape the future of the economic
stability of the nation & propel the country towards a
flourishing phase it is destined to.

12. REFERENCES:
 m.thehindubusinessline.com
 www.bankexamtoday.com
 Agarwal A.N.,Indian Economy
 www.rbi.org.in