Credit Policy and Flow — Mains Questions

Critically analyze the effectiveness of Priority Sector Lending (PSL) as a tool for financial inclusion and inclusive growth in India. What are its major challenges and how can they be addressed?

Examine how the Reserve Bank of India (RBI) uses its credit policy framework to manage sectoral credit allocation. Discuss the specific measures taken post-COVID-19 to ensure credit flow to critical sectors and their economic impact.

The effectiveness of monetary policy transmission through the credit channel is crucial for achieving macroeconomic stability. Discuss the factors influencing this transmission in India and the steps taken by the RBI to improve it.