Reserve Bank of India is the central bank of the country which regulates the banking and financial activities in the economy. It inter alia bears the responsibility of drafting and monitoring the monetary policy framework, by detailing the employment of appropriate monetary instruments to achieve the objectives as given under the Reserve Bank of India Act, 1934 (“Act”). A monetary policy, as provided under the Act, is a policy addressing the rising issues in Indian economy which is aimed for maintenance of price stability with simultaneous growth.
This research paper seeks to achieve a better understanding of this monetary policy framework as applicable in India while studying the development in objectives of the monetary policy and its scheme with special emphasis on role of instruments. The paper further aims to analyse the process of monetary policy, following it with a reflection on the contemporary changes in the light of the unprecedented pandemic of COVID-19.