Output gap of the whole economy, inflation expectation, international commodities prices, exchange rates are interrelated in a complex fashion. In such a complex world, it is no easy task to decide on how precisely monetary policy can control prices,  BIS Review 20/2001  5  and also on how far it should do. Suppose an oil price shock gives rise to inflation pressures.
In recent times, many banks appear to have abandoned their essential intermediation role of mobilizing savings and inculcating banking habit at the household and micro enterprise levels.