Non-Operative Financial Holding Company

April 24, 2015

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...

Money Supply and Monetary Aggregates

March 24, 2015

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

Money Market Reforms in India

March 24, 2015

Reserve Bank of India is the biggest regulator of the Indian markets. It controls the monetary policy of India. Its control is however limited to the organised part of economy and the unorganised sector which has a significant presence is largely unregulated. RBI frequently introduces many reforms to bolster...

Certificate of Deposit

March 23, 2015

Certificate of Deposit (CD) refers to a money market instrument, which is negotiable and equivalent to a promissory note. It is either issued in demat form or in the form of a usance promissory note. This instruments is issue in lieu of the funds deposited at a bank for...

What is Branch Banking?

March 15, 2015

Branch Banking is still an integral part of Indian banking system as most Indians still believe in cash transactions and prefer to visit banks in person for routine banking operations. Bank branches are the face of the banks where customers can visit and talk to the officials for getting...

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 –...

What is Liquidity?

February 28, 2015

By Liquidity, we simply mean to refer to the money floating in the system that is available to all stakeholders of the markets viz.  Individuals, corporate entities and the government. We know that liquidity is influenced by the demand and supply of money in the system.  RBI can either...

DS Kolamkar Panel

January 13, 2015

RBI is considering proposal of DS Kolamkar Panel, to permit FIIs and Commercial Banks to trade on Indian Commodity Exchanges. DS Panel had deeply studies the functioning of commodity markets. As per the findings, the panel had noticed that participation of banks and FIIs could considerably bring down the...

Interest Rate Regulation

November 6, 2011

India has pursued financial sector reforms as a part of structural reforms initiated in the early 1990s. A major component of the financial sector reform process was deregulation of a complex structure of deposit and lending interest rates. The administered interest rate structure proved to be inefficient. It, therefore,...

Origin and History of Reserve Bank of India

April 28, 2011

The genesis of Reserve Bank of India (RBI) started in 1926 when the Hilton-Young Commission  or the Royal Commission on Indian Currency and Finance made recommendation to the British Government of India  for creation of a central bank. The chief objective of such recommendation were twofold: To separate the...