Monetary Policy: A Study based upon the effect of change in monetary policy on the Indian financial market

In India the main objective of credit control policy by Reserve Bank of India (RBI) in the era of planned economic development was to achieved ‘growth with stability’. In the context of this objective RBI adopts ‘controlled credit expansion’ policy which means the main long term objective of banks monetary policy is to expand credit. But to control this credit expansion according to the present need and circumstances of our economy RBI has made different solution. Since January 2015, the RBI has cut policy rates by a cumulative 125 basis points (bps), while banks have cut one-year deposit rates by an average 130 bps and lending by 50 bps, which includes the base rate cuts in the month of September. On 29 September 2015, when RBI declare its new rates of monetary policy many commercial bank(i.e. ICICI Bank, Yes Bank, Kotak Mahindara and Allahabad Bank etc.) joined this changes and also change their interest rate which is directly affect Indian market. This paper is reveals the effect of new monetary policy on the Indian market.