Monetary Policy

Indian-rupees

Near Money

Near money is a concept closely related to liquidity. Liquidity refers to how fast the money can perform the economic actions like buying, selling, or paying debt, meeting immediate wants and needs. There should not be loss of time and…

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Money Supply and Monetary Aggregates

All the money held with public, RBI as well as government is called Total Stock of Money. Money Supply is that part of this Total Stock of Money which is with public. By public we refer to the households, firms,…

Indian-Rupees

Key facts about Treasury Bills in India

The bill market is a sub-market of the money market in India. There are two types of bills viz. Treasury Bills and commercial bills. While Treasury Bills or T-Bills are issued by the Central Government; Commercial Bills are issued by…

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Modernizing the monetary policy framework

Deciding on monetary policy framework by a committee is the practice of US and UK. However the objective of the monetary policy committee differs among the nations. In UK the objective is to stabilize the price mandated by the government.…

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RBI’s Monetary Policy

RBI works as the monetary authority of India and there by operates the monetary policy. Reserve Bank of India announces Monetary Policy every year in the Month of April. This is followed by three quarterly Reviews in July, October and…

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Repo Rate

Repo rate, or repurchase rate, is the rate at which RBI lends to banks for short periods. This is done by RBI buying government bonds from banks with an agreement to sell them back at a fixed rate. Objective of…

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Reverse Repo Rate

Reverse repo rate is the rate of interest at which the RBI borrows funds from other banks in the short term . This is done by RBI selling government bonds / securities to banks with the commitment to buy them…

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Functions of Reserve Bank of India

The functions of the Reserve Bank of India can be divided into various heads discussed as below: RBI as Monetary Authority of India RBI works as the monetary authority of India and there by operates the monetary policy. Monetary policy…

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Cash Reserve Ratio

The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve bank of India as a portion of their Net Demand and Time Liabilities (NDTL). The objective of CRR is to ensure the…

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What is Bank Rate?

Bank Rate refers to the official interest rate at which RBI will provide loans to the banking system which includes commercial / cooperative banks, development banks etc. Such loans are given out either by direct lending or by rediscounting (buying…