The bank lending channel of monetary policy transmission: evidence from an emerging aarket, India

Saumitra Bhaduri and Goyal Toto

MPRA Paper from University Library of Munich, Germany

Abstract: This study analyzes the monetary policy transmission in India with the help of bank lending channel hypothesis. We test the shift in loan supply emanating from the changes in the prime policy rate used by the Reserve Bank of India. Using yearly bank balance sheet data from 1996 to 2007, the paper provides evidence of an operational BLC in India. Further, segregating banks by asset size and liquidity, we find that small, illiquid banks are more affected by policy changes, and the effect is more pronounced in areas of non-priority sector lending. Finally, the domestically owned banks are more sensitive to policy rate changes vis-à-vis foreign banks.

Keywords: Bnak; lending; Channel; India (search for similar items in EconPapers)
JEL-codes: G38 (search for similar items in EconPapers)
Date: 2012-04-10
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/37997/1/MPRA_paper_37997.pdf original version (application/pdf)

Related works:
Journal Article: The bank lending channel of monetary policy transmission: evidence from an emerging market, India (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37997

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().