Monetary policy refers to the actions undertaken by a country’s central bank, such as the Reserve Bank of India, to regulate the supply of money and credit in the economy to achieve objectives like price stability, economic growth, and employment generation. It uses various instruments to influence liquidity, interest rates, and credit availability. These instruments are broadly classified into quantitative (or general) instruments and qualitative (or selective) instruments. Quantitative instruments, also known as general tools, affect the overall volume of credit in the economy. The most commonly used quantitative instruments include bank rate policy, open market operations, cash reserve ratio, and statutory liquidity ratio. The bank rate is the rate at which the central bank lends to commercial banks. By raising or lowering the bank rate, the central bank can make borrowing more expensive or cheaper, thereby controlling credit expansion. Open market operations involve the buying