[BES171] Monetary Policy: Qualitative Tools, Priority Sector Lending, Credit Authorization Scheme, Selective Credit Control, Limitations & Mains Answer Writing

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India Yearbook
  1. Monetary Policy#6: PSL, SCC & CAS- Priority Sector Lending Norms
  2. Monetary Policy#7: LTV, Margin Requirement, Moral Suasion & Direction Action
  3. Monetary Policy#8: Limitations and Non-Transmission, Base Rate vs MCLR
  4. Monetary Policy#9: UPSC- Mains Answer Writing Practice for GS Paper-3

Prologue: from now on, all Powerpoint available at http://mrunal.org/powerpoint

Monetary Policy#6: PSL, SCC & CAS- Priority Sector Lending Norms

  • In the previous sessions, we learned about the quantitative tools of monetary policy, which decide the ‘volume’ of credit in an economy. Now we shall look into the qualitative tools of monetary policy, which decide the ‘distribution’ of credit in an economy.
  • What is selective credit control? Credit authorization scheme (CAS): its purpose and limitations
  • Priority sector lending (PSL) in India: Origin, purpose, present framework, categories; penalty in RIDF and SEDF, limitations.
  • What are priority sector lending certificates?
  • Despite incrementalism in the allocation of agriculture credit in each budget, why is there a problem of farmer suicides? How are RBI and Government of India addressing this issue?
  • Budget 2017 provisions for agriculture loans and its distribution to targeted beneficiaries via Core banking solution (CBS) in the cooperative banks.

Monetary Policy#6: Priority Sector Lending Norms PSL
Youtube Link: https://youtu.be/u8QKLC2cReI

Monetary Policy#7: LTV, Margin Requirement, Moral Suasion & Direction Action

  • In this part, we’ll windup the remaining qualitative tools of monetary policy viz. Loan to value and margin requirements, consumer credit control on durables.
  • Moral suasion as a tool of monetary policy: meaning, examples and limitations
  • Direct action as a tool of monetary policy: powers conferred to RBI under the RBI Act, banking regulation act, prevention of money laundering act (PMLA), foreign exchange Management act 1999 (FEMA) and payment and settlement system act 2007
  • Next part, we shall see the limitations of monetary policy.

Monetary Policy#7: LTV, Margin Requirement, Moral Suasion & Direction Action
Youtube Link: https://youtu.be/HLyyLG1NuGc

Monetary Policy#8: Limitations and Non-Transmission, Base Rate vs MCLR

  • Despite a rate cut of 175 basis points by RBI during January 2015 to December 2016, the banks have passed on barely 71 basis points cut in their average lending rates. So what are the factors responsibiel for this incompl
  • What are the factors inhibiting the growth of bank deposits in India? Impact of Inflation and real interest rate, small savings schemes, financial repression, outward remittance, election funding and financial inclusion on banks’ deposits
  • Lending rate methods in India: benchmark prime lending rate. (BPLR), base rate and the latest marginal cost of fund based lending rate (MCLR).
  • Despite demonetization, and the subsequent growth in bank deposits, why has MCLR lending rate not declined sufficiently?
  • Criticism of Dr.Raghuram Rajan’s hawkish monetary policy by Subramanian Swamy and Nirmala Sitharaman. Has it really hurt India’s growth story by depriving cheap loans to MSME sectors?

Monetary Policy#8: Limitations and Non-Transmission, Base Rate vs MCLR
Youtube Link: https://youtu.be/CtbrBaVwTzM

Monetary Policy#9: UPSC- Mains Answer Writing Practice for GS Paper-3

  • In this last session on monetary policy, write answer to following question in 200 words within eight minutes- “Monetary policy is both a catalyst (उद्दीपक) and an impediment (अवरोधक) to India’s growth story.” Examine critically.
  • In this session, we’ll see the common error in writing this answer, as well the the framework for the model answer, including its introduction, body and conclusion.

Monetary Policy#9: UPSC- Mains Answer Writing Practice for GS Paper-3
Youtube Link: https://youtu.be/y_Q_Jeos2xc
With this, I finish the monetary policy lecture series. Next we shall see the problem of NPA and how a bad bank known as “PARA” can help in fixing it?

Mrunal recommends

  1. (free) NCERT, NIOS, TN-Books
  2. Environment by ShankarIAS
  3. Indian Polity M.Laxmikanth (Hindi | English)
  4. Art & Culture by Nitin Singhania (Hindi | English)
  5. Spectrum: Modern History (Hindi | English)
  6. Bipin Chandra: Post Independence
  7. Fast-track to Arithmetic Rajesh Verma
  8. MK Pandey’s Analytical Reasoning
  9. Disha’s Topicwise Paperset (Hindi | English)
  10. School Atlas
  11. Mains: Language papers
  1. (free) NCERT, NIOS, TN-Books 4 History,Geo,Sci
  2. Indian Polity M.Laxmikanth (Hindi | English)
  3. Spectrum: Modern History (Hindi | English)
  4. Maths: Quantam CAT Sarvesh Kumar
  5. Objective General English SP Bakshi
  6. Word Power made Easy -Norman Lowe
  7. Topic wise Solved Paperset by Disha

So far 40 Comments posted

  1. Nilesh londhe

    Hello sir i need ur help to choose a optional subject ..i m studying in mechanical engineering so which subject i put optional …please reply me please ..have many hopes from u..

    1. sanjeev

      you can take your own branch subject as a optional .you are a mechanical engineering student so you can take mechanical engineering as a optional subject because u have read it for 4 years so it will be good for u ,but if u think that you are weak in it then you should put some effort and grip on it. hope it helps.


      If u can handle the Mechanical Engg. then it will be the best option. Go through previous year question papers published by Vishal Publication and identify the topic from book, then read the basic concept of that particular topic & then practice relevant problems from solved examples.

  2. Akash

    Thank You so much, SIr. One request though, can you provide the tentative date by which you plan to finish this year’s series so that we can plan our revision.

  3. Shanky Verma

    Dear Sir,
    PLease provide the tentative date of the schedule for BES17 series……..

  4. Aditya

    pls complete the series before prilims if possibel

  5. Yogesh

    Mrunal sir, is bar revision karne ka time de dena sir, pichle baar to kuch nahi kar paye the, kyun exam ki kuch din pehle usne khatam hua tha
    So pls sir is bar thod jaldi

  6. NEHA

    Mrunal sir,
    what is difference between ACCOCHAM, CII, FICCI ?

    1. BATMAN

      Refer Wikipedia.

  7. shaan

    sir will you complete this series before prelims2017

  8. Swadesh

    @Nilesh: No one can tell you which optional to choose. Start preparing GS from NCERT and you will understand which subject you like most. The subject you like most , choose that subject as your optional. There are less people who choose science and engineering subject as their optional.

  9. Lakshmi

    Is FCI going to recruit in 2017

  10. Sayeed anwar

    Please provide pros and cons(answer writting etc) of urdu optional.

  11. Narendra Srivastava

    I m post graduate in ancient history. But m not decided to select a optional subject bcz m confused between sociolog and history. So what I got a optional subject plz guide me sir….

    1. naveenBT

      May be you can look into previous year questions. think a while. go through each questions. check your comfortness. do this for 2-3 years of recent paper and decide.. Just a suggestion.

  12. Nilesh londhe

    Sir can i get complete list of useful NCERT books ..which are sufficient for IAS studies.

  13. Nilesh londhe

    Will u give me sufficient list of NCERT Books

    1. naveenBT

      All books starting from 6th to 12th. History, Geography, Economy and polity. Few book will help for mains.

  14. Arun Kumar Barik

    Is gel pen allowed in CSE?

    1. naveenBT

      yes. Better use Pilot pens. They are good

  15. Ashutosh

    Sir, mujhe geography option ka preparation krna h. But kuch v pta ni hai. Mtlb books and preparation strategy ke bare me… kahaan se and kaise start karu kuch smjh ni aa raha… plz sir get me out of it….

  16. sargun

    SIR you are doing great job.keep it up!

  17. sambu

    Mrunal sir upload remaining videos … thanks

  18. Lio stm

    Sir i am very very weak in maths so is there any chance of me to crack UPSC

  19. nero

    Sir i am unable to open the PPt files of BES-2017.Kindly look into this,i guess the files are corrupt or suggest the ways to open them.

  20. sarthak

    mrunal sir pls upload further lacture

  21. Sourabh

    Continue i visit website in hope that you upload economy lecture.
    It’s 14 day up
    Please complete it before atleast 10 days, otherwise your MEHNAT and our TIME both will be worthless

    So plz sir
    I appreciate your efforts and i respect it.
    Plz hope leke usse pura bhi Karoo

  22. sarthak

    mrunal sir total aap ke hi upper dependent hai eco ke liye may tk sare lecture khatam honge ki nhi pls reply




  24. anamika

    sir…please upload remaining videos

  25. Ankita

    Hello Sir,
    When will u upload next videos? This is largest gap between two successive sessions uploaded so far. I am worried, atleast just let us know by May end what all can be covered so that we can study the remaining on our own and plan accordingly. Please reply.

    I was actually completely relying on your lectures for Economics and Economic Survey. I am deeply thankful to you for explaining concepts in such simple manner.


  26. Mohamed irfan

    Sir Pls upload the remaining videos I have a whole group of friends who r depending on your video for economic survey prep

    So Pls sir

  27. Gaurav Satsangi

    Sir there is so much delay already..please upload the next set of videos

  28. SuperaMan

    Sir Please do update remaining videos, Please please do it fast

  29. Alizar

    Sir I study in 2nd sem Sir I want to know that what is the main aim of your mrunal website that you want to provide us
    Objective wise ?
    Content wise?
    ( Sir sorry I know that it is senseless question but Sir plz reply)

  30. manash

    sir please inform us that by which date this series will be completed so that we can plan accordingly, as only 40 days are left

  31. Disha

    If Sir is not available, can someone else not just let us know the exact status of the situation. What is the matter exactly? Please somebody from mrunal team just reply. Please it’s a humble request.

  32. Shanky Verma

    Sir ,
    please tell us the schedule for this years series……..
    so that we can plan accordingly………..

  33. akhilnayak

    hloo sir iam studying 11 class..which group i must choose for ias

  34. surya

    is it require to take coaching for civil services exam?

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