…..Rangarajan’s successor Bimal Jalan repositioned the bank rate as the real signalling rate on the lines of the US Federal Reserve rate and delinked it from all refinance rates. This is in conformity with the recommendations of the report of a panel on financial sector reforms, headed by former RBI governor M. Narasimham. Jalan was in favour of using the bank rate sparsely, and focus on other instruments like repo rates, etc., to send short-term interest-rate signals…………
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