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Financial Resolution and Deposit Insurance Bill, 2017

In October, 2017, the Financial Resolution and Deposit Insurance Bill 2017 has been referred to a Joint Parliamentary Committee of 30 members from both the Houses. This bill, once becoming a law, would repeals the Deposit Insurance and Credit Guarantee Corporation Act, 1962 to transfer the deposit insurance powers and responsibilities to the proposed Resolution […]

India’s Forex Reserves and United States’ Concerns

In recent months, India’s total Forex reserves are hovering around USD 400 Billion and India is at sixth position in terms of Forex reserves. In the second week of October, the US treasury said that it would closely monitor the RBI’s policies as there is an increased scale and persistence of dollar purchases. Some fundamental […]

Public Sector Asset Rehabilitation Agency (PARA)

The Public Sector Asset Rehabilitation Agency (PARA) colloquially called “Bad Bank” is a proposed agency to assume the Non-Performing Assets (NPA) of public sector banks in India and to deal with the recovery of the bad loans. This agency has been proposed in Economic Survey 2016-17. The NPA Problem At end-September 2016, the NPAs of […]

RBI and RTI: Recent Supreme Court Judgement

On December 16, the Supreme Court of India said that RBI cannot reject the plea asking information regarding private and public banks under the Right to Information (RTI) Act. While considering the several appeals filed by the RBI against various orders of the Central Information Commission (CIC) and High Courts asking the RBI to disclose […]

ON Financial Stability Report

Indian economy has withstood the global pressures with ease at a time when sluggishness was apparent in European and Japanese economic fronts. It is the sharp decline in oil prices coupled with declining energy prices which have made the conditions favourable and boosted dividend for India. All this was further enhanced by declining inflation, narrowing […]

Payment Banks

About 40%-50% of India’s 1.25 billion population is eligible to open a bank account, but is still unbanked . In the Union Budget 2014-2015, the finance minister Arun Jaitley announced that RBI will create a framework for licensing small banks and other differentiated banks. The objective of differentiated banks was to serve the niche interests […]

Non-Operative Financial Holding Company

In February 2013, RBI had issued final guidelines to apply for new banking licenses in the private sector. Under these guidelines, RBI said that the entities or groups in the private sector, entities in public sector and Non-Banking Financial Companies (NBFCs) can set up a bank, which shall be a  wholly-owned Non-Operative Financial Holding Company […]

Public Debt Management Agency

Public Debt Management Agency has been proposed to be set up by the Finance Minister in his budget 2015-16 speech. This separation of debt management from monetary policy is being seen as a watershed reform in the financial circles. Debt management role was performed by RBI. It is the Central Bank which laid regulations about […]

Trade Receivables Discounting System

Trade Receivables Discounting System or TReDS is a welcome step by RBI to secure finances for micro, small and medium enterprises. It has been set up under the regulatory framework set up by RBI under Payment and Settlement Systems Act 2007. Rationale MSMEs have always been at the receiving end of the wrath of the […]

Money Supply and Monetary Aggregates

What do you understand by Money Supply? Differentiate between the broad money, narrow money and reserve money. Which is more liquid? Why?