In fact, complex situations do warrant dynamics of different combinations of direct and indirect instruments, in multiple forms, to suit the conditions – especially the transmission mechanism.
Similarly, while there is considerable merit in maintaining distinction between monetary and prudential policies of the central bank, the Reserve Bank did not hesitate to enhance the provisioning requirements and risk weights for select categories of banking assets, namely real estate, housing, consumer finance and capital market exposures. There has also been close monitoring of off-balance sheet exposures of banks.