Liquidity Management — Mains Questions

Analyze the evolution of RBI's liquidity management framework from the pre-liberalization era to the current system. How have recent innovations like Standing Deposit Facility enhanced the effectiveness of monetary policy transmission?

Examine the role of reserve requirements (CRR and SLR) in India's liquidity management framework. Assess their effectiveness in achieving monetary policy objectives while considering their impact on banking sector profitability.

Critically evaluate RBI's liquidity management response during the COVID-19 pandemic. What lessons can be drawn for future crisis management in monetary policy?