liquidity

RBI has introduced Incremental CRR

November 28, 2016

To absorb the surplus liquidity available in the banking system post demonetisation, the Reserve Bank of India (RBI) has mandated the banks to maintain incremental cash reserve ratio of 100% effective the fortnight ended November 26. It will be applicable to deposits made between September 16 and November 11...

Near Money

March 24, 2015

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 value in perming the economic functions. Thus, liquidity of...

Key facts about Treasury Bills in India

March 17, 2015

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 financial institutions. Types of Treasury Bills Treasury Bills are...

Marginal Standing Facility

March 1, 2015

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 against the approved government securities. The question is –...

Open Market Operations

April 28, 2011

Open Market Operations refer to the purchase and sale of the Government securities (G-Secs) by RBI from / to market. The objective of Open Market Operations is to adjust the rupee liquidity conditions in the economy on a durable basis. When RBI sells government security in the markets, the...

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