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Monetary Transmission, Ownership And Crisis: How Robust Is The Indian Evidence?

Author

Listed:
  • Jugnu Ansari

    (Centre for Advanced Financial Research and Learning (CAFRAL))

  • Saibal Ghosh

    (Centre for Advanced Financial Research and Learning (CAFRAL))

Abstract

Employing data for the period 2001-2014, the paper investigates the lending and loan pricing behavior of public and private banks to monetary policy. Three major findings emerge. First, while both the interest rate and the bank lending channel are relevant, there is a trade-off: the impact of the former is much higher as compared to the latter, although it occurs with a significant lag. Second, we find that private banks exhibit a much larger reaction to monetary policy shock under the interest rate channel whereas public banks show larger response under the bank lending channel. And third, state-owned banks cut back lending during periods of crisis, although no such behavior is in evidence for private banks.

Suggested Citation

  • Jugnu Ansari & Saibal Ghosh, 2016. "Monetary Transmission, Ownership And Crisis: How Robust Is The Indian Evidence?," Working Papers 022326, Centre for Advanced Financial Research and Learning (CAFRAL).
    • Handle: RePEc:ris:cafral:022326
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    File URL: https://www.cafral.org.in/sfControl/content/Speech/46201640127PM-Ansari(2016)_Monetary_Transmission_Ownership_and_Crisis-How_Robust_is_the_Indian_Evidence.pdf
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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