Interest rate regulation is undertaken by every central bank of the country at the time of credit crisis. This either allows the flow of the credit or curtail the same. Increase in the bank rate, which is the rate at which the central bank lends to the banks operating in the country restricts the lend able resource at their disposal as they are deterred from availing funds at a higher cost. When such situation arises the industries are deprived of the loans from the banks at an affordable cost and it results in slower industrial growth. Indirectly, the GDP growth of the country gets affected.
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