Bank Lending Channel-A Literature Review

The Bank lending channel (BLC) of Monetary policy transmission mechanism (MPTM) has been an important field of study in the banking industries of both developed and developing economies. The present paper tries to look at various studies that have assessed bank lending channel, along with their relationship to various bank characteristics. In the process, the study evaluates the methodological and empirical development on studies related to the bank lending channel. Further, the study also concentrates on reviewing the empirical literature regarding bank lending channel of monetary transmission mechanism with established insights from the studies based on the bank lending channel in relation to various bank characteristics. It also focuses on assessment of the different methodological approaches on banking lending channel in relation to competition and efficiency.