Administered Interest Rates in India

The rate of interest is an important price in any economy. If it is determined mainly by the market forces, it may help in taking appropriate decisions about saving, investment, allocation of resources, financial and monetary policy, etc. However, the level and structure of interest rates in India h...

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Bibliographic Details
Published in:Economic and political weekly 1985-06, Vol.20 (25/26), p.1089-1104
Main Author: L. M. Bhole
Format: Article
Language:English
Subjects:
Bank credit
Bank loans
Bank rates
Credit
Economic systems
Economics
Financial investments
Interest rates
Monetary policy
Savings
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Summary:The rate of interest is an important price in any economy. If it is determined mainly by the market forces, it may help in taking appropriate decisions about saving, investment, allocation of resources, financial and monetary policy, etc. However, the level and structure of interest rates in India have remained very closely regulated by the authorities. The present study examines the working of this administered system of interest rates, and discusses the issues and considerations which need to form the basis of future interest rate and monetary policies for the Indian economy.
ISSN:0012-9976
2349-8846