Monetary measures play an important role in the development of a country. Under the new economic policy, several steps have been taken. On the recommendations of Narasimham Committee, following measures have been adopted:
(i) Abolition of direct credit programmes.
(ii) Free determination of interest rate.
(iii) Reconstitution of banking system.
(iv) More freedom to banks.
(v) Improvement in banking system.
(vi) Reduction in liquidity ratio.