Lending activities must be conducted from inside the bank. Investment banking services are provided by the banks as an in-house departmental activity or through subsidiary. 5. The Indian banking system has grown phenomenally over the years. What has been the actual contribution of banks for mobilizing savings and engineering investments in the Indian economy?
In sum, in the case of rapid capital inflows, EMEs’ central banks should: pursue as a primary objective a low and stable rate of inflation, allowing market adjustments in interest and exchange rates, unless such adjustments could lead to an unacceptable equilibrium and threaten future financial stability; and second, If such non-equilibrium adjustments are a possibility, use transparent, well targeted and transitory macroprudential measures.