Bank ownership impacts monetary policy effectiveness, boosting lending in tight times.
The study looked at how different types of banks in India react to changes in monetary policy. They found that banks owned by different entities respond differently to central bank policies. In times of tight money, banks are more likely to adjust their lending practices compared to easy money periods. The study also showed that the impact of monetary policy changes varies between short-term and medium-term lending. These findings have important implications for how monetary policy affects bank lending behavior in India.