Reserve Bank of India

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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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Marginal Standing Facility

Marginal Standing Facility is a new Liquidity Adjustment Facility (LAF) window created by Reserve Bank of India in its credit policy of May 2011.  MSF is the rate at which the banks are able to borrow overnight funds from RBI…

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Board for Payment and Settlement Systems

In 2005, RBI constituted the Board for Payment and Settlement Systems (BPSS) as a Committee of its Central Board. The functions are to regulate and supervise the payment and settlement systems. This is also chaired by the Governor of RBI…

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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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Liquidity Adjustment Facility (LAF)

Liquidity Adjustment Facility (LAF) is the primary instrument of Reserve Bank of India for modulating liquidity and transmitting interest rate signals to the market. It refers to the difference between the two key rates viz. repo rate and reverse repo rate.…

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Ways and Means Advances

RBI works as a banker to the State Governments by agreement. But there is no fixed minimum reserve balance for the State Governments. All state Governments are required to maintain a minimum reserve balance with RBI, but it depends upon the size…

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Role of RBI as Banker & Debt Manager to the Government

In 1935, Reserve Bank of India, on its inception became the Banker and Debt Manager to the Government and this is a very important function. As per the Reserve Bank of India Act 1934, the Central Government entrusts the Reserve Bank…

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How Currency is Issued in India?

In India, the paper currency was first issued during British East India Company rule. The first paper notes were issued by the private banks such as Bank of Hindustan and the presidency banks during late 18th century. Via the Paper…

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Board for Financial Supervision

The Board of Financial Supervision (BFS) was constituted in November 1994 as a committee of the Central Board of Directors. Its objective is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies. The…