Chakravarthy commitee ppt
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The Sukhamoy Chakravarty committee was formed in 1985 under the chairmanship of Professor Sukhamoy Chakravarty to review India's monetary system and improve monetary regulation in order to enable price stability. The committee found issues with the monetary system during 1970-1980, including increased credit from the RBI to the government and increased statutory liquidity ratio for banks. The committee submitted its report in April 1985 with recommendations, including interest rates on government securities and bank deposit rates.
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Monetary policy of India
The document discusses monetary policy in India. It begins by defining monetary policy and identifying the Reserve Bank of India as the central monetary authority. It then outlines the key objectives of monetary policy as maintaining full employment, price stability, economic growth, and balance of payments. The document goes on to explain the types of monetary policy as expansionary and contractionary. It also details the various tools used in monetary policy, including cash reserve ratio, statutory liquidity ratio, repo rate, and open market operations. In its conclusion, the document states that monetary policy deals with money supply to prevent inflation and recession through instruments administered by the RBI.
Chakravarthy committiee
The S. Chakravarty Committee was formed in 1985 under the chairmanship of Prof. Sukhamoy Chakravarty to review India's monetary system and enable price stability. The committee submitted its report in April 1985 with two major recommendations: 1) requiring public and private sector entities to include penal interest clauses of 2% above bank rates for delayed payments, and 2) classifying credit limits under three heads (cash credit I for government supplies, cash credit II for special circumstances, and normal working capital limit) with different applicable interest rates.
Money supply
This document defines and explains the key components of money supply and how it is measured. It discusses four main measures of money supply: M0, M1, M2, and M3. M1 includes currency in circulation and demand deposits. M2 adds savings deposits and time deposits. M3 includes longer-term time deposits. Each measure expands the definition in terms of liquidity and availability for use in transactions. The document also explains the components that make up each measure, such as currency, demand deposits, savings deposits, and time deposits.
Credit control by RBI
The document discusses credit control methods used by the Reserve Bank of India (RBI). It outlines both quantitative and qualitative methods. Quantitative methods like bank rate, open market operations, cash reserve ratio, and statutory liquidity ratio aim to control the total volume of credit. Qualitative methods like rationing credit, margin requirements, and directives aim to influence the use and direction of credit flows. The RBI uses these various tools to promote economic stability and growth.
Banking reforms and its impact in India
In India, commercial banks are the oldest, largest and fastest growing financial intermediaries. They have been playing a very important role in the process of development. In 1949 RBI was nationalized followed by nationalization of Impearl Bank of India (New State Bank Of India) in 1995.
Financial sector is treated as to be the back bone of the economy. The quality in the working of financial sector truly impacts the profitability of the banks which as a whole impacts the economy and GDP of a country. Thus, it is important to explore the impact of reforms on the profitability of Indian banks. The paper focuses on the impact of reforms on profitability of Indian banks. This research will evolve the performance of financial institutions only after 1998 and in the wake of Narsimham Committee II.
The study is micro economic in nature and seeks to analyze the productivity of banking systems. Here an attempt has been made to examine the impact of reforms. The impact of reforms on the profitability of Indian banks has been examined on the basis of following parameters: Interest income to total assets, Operating Profit to Total Asset, Return on Asset and Return on Advances. More importantly such analysis is useful in enabling policymaker to identify the success or failure of policy initiative or alternatively highlight different strategies undertaken by banking firms which contribute to their success. Here an attempt has been made to examine the impact of banking reforms on profitability of Indian banking industry.
GROWTH PHASE IN INDIAN BANKING SECTOR
In over five decades since dependence, banking system in India has passed through five distinct phase, viz.
(1) Evolutionary Phase (prior to 1950)
(2) Foundation phase (1950-1968)
(3) Expansion phase (1968-1984)
(4) Consolidation phase (1984-1990)
(5) Reformatory phase (since 1990)
Narasimham Committee
The Narasimham Committee was formed in 1991 and 1998 to reform India's financial system. The 1991 report recommended reducing statutory liquidity and cash reserve ratios, phasing out directed credit programs, deregulating interest rates, restructuring banks, and establishing an asset recovery tribunal. The 1998 report recommended strengthening banks' capital adequacy, narrowing weak banks' scopes, reviewing banking laws, and increasing bank autonomy and privatization. Both reports aimed to modernize and stabilize India's banking system.
Banking Sector Reforms
The document discusses the recommendations of the Narsimham Committee I, which was formed in 1991 to recommend reforms for improving the efficiency and effectiveness of India's financial system and banking sector. The committee recommended several reforms, including reducing statutory pre-emptions like SLR and CRR, introducing interest payments on CRR balances, phasing out directed lending programs, increasing transparency, improving loan recovery processes, deregulating interest rates, restructuring banks, introducing standardized asset classification and provisioning norms, allowing entry of private banks, abolishing branch licensing controls, implementing capital adequacy requirements, standardizing income recognition practices, and having RBI solely regulate the banking system instead of joint control with the Ministry of Finance. Many of the recommendations were
Role of rbi in indian economy
The Reserve Bank of India (RBI) is the central bank of India and was established in 1935. It regulates the entire banking system and monetary policy in India with the objectives of maintaining price stability and adequate credit. RBI acts as a banker, debt manager, and financial advisor to the government, regulates foreign exchange and payment systems, and works to promote the development of the Indian economy through various institutions and policies.
Recommended
Monetary policy of India
The document discusses monetary policy in India. It begins by defining monetary policy and identifying the Reserve Bank of India as the central monetary authority. It then outlines the key objectives of monetary policy as maintaining full employment, price stability, economic growth, and balance of payments. The document goes on to explain the types of monetary policy as expansionary and contractionary. It also details the various tools used in monetary policy, including cash reserve ratio, statutory liquidity ratio, repo rate, and open market operations. In its conclusion, the document states that monetary policy deals with money supply to prevent inflation and recession through instruments administered by the RBI.
Chakravarthy committiee
The S. Chakravarty Committee was formed in 1985 under the chairmanship of Prof. Sukhamoy Chakravarty to review India's monetary system and enable price stability. The committee submitted its report in April 1985 with two major recommendations: 1) requiring public and private sector entities to include penal interest clauses of 2% above bank rates for delayed payments, and 2) classifying credit limits under three heads (cash credit I for government supplies, cash credit II for special circumstances, and normal working capital limit) with different applicable interest rates.
Money supply
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Credit control by RBI
The document discusses credit control methods used by the Reserve Bank of India (RBI). It outlines both quantitative and qualitative methods. Quantitative methods like bank rate, open market operations, cash reserve ratio, and statutory liquidity ratio aim to control the total volume of credit. Qualitative methods like rationing credit, margin requirements, and directives aim to influence the use and direction of credit flows. The RBI uses these various tools to promote economic stability and growth.
Banking reforms and its impact in India
In India, commercial banks are the oldest, largest and fastest growing financial intermediaries. They have been playing a very important role in the process of development. In 1949 RBI was nationalized followed by nationalization of Impearl Bank of India (New State Bank Of India) in 1995.
Financial sector is treated as to be the back bone of the economy. The quality in the working of financial sector truly impacts the profitability of the banks which as a whole impacts the economy and GDP of a country. Thus, it is important to explore the impact of reforms on the profitability of Indian banks. The paper focuses on the impact of reforms on profitability of Indian banks. This research will evolve the performance of financial institutions only after 1998 and in the wake of Narsimham Committee II.
The study is micro economic in nature and seeks to analyze the productivity of banking systems. Here an attempt has been made to examine the impact of reforms. The impact of reforms on the profitability of Indian banks has been examined on the basis of following parameters: Interest income to total assets, Operating Profit to Total Asset, Return on Asset and Return on Advances. More importantly such analysis is useful in enabling policymaker to identify the success or failure of policy initiative or alternatively highlight different strategies undertaken by banking firms which contribute to their success. Here an attempt has been made to examine the impact of banking reforms on profitability of Indian banking industry.
GROWTH PHASE IN INDIAN BANKING SECTOR
In over five decades since dependence, banking system in India has passed through five distinct phase, viz.
(1) Evolutionary Phase (prior to 1950)
(2) Foundation phase (1950-1968)
(3) Expansion phase (1968-1984)
(4) Consolidation phase (1984-1990)
(5) Reformatory phase (since 1990)
Narasimham Committee
The Narasimham Committee was formed in 1991 and 1998 to reform India's financial system. The 1991 report recommended reducing statutory liquidity and cash reserve ratios, phasing out directed credit programs, deregulating interest rates, restructuring banks, and establishing an asset recovery tribunal. The 1998 report recommended strengthening banks' capital adequacy, narrowing weak banks' scopes, reviewing banking laws, and increasing bank autonomy and privatization. Both reports aimed to modernize and stabilize India's banking system.
Banking Sector Reforms
The document discusses the recommendations of the Narsimham Committee I, which was formed in 1991 to recommend reforms for improving the efficiency and effectiveness of India's financial system and banking sector. The committee recommended several reforms, including reducing statutory pre-emptions like SLR and CRR, introducing interest payments on CRR balances, phasing out directed lending programs, increasing transparency, improving loan recovery processes, deregulating interest rates, restructuring banks, introducing standardized asset classification and provisioning norms, allowing entry of private banks, abolishing branch licensing controls, implementing capital adequacy requirements, standardizing income recognition practices, and having RBI solely regulate the banking system instead of joint control with the Ministry of Finance. Many of the recommendations were
Role of rbi in indian economy
The Reserve Bank of India (RBI) is the central bank of India and was established in 1935. It regulates the entire banking system and monetary policy in India with the objectives of maintaining price stability and adequate credit. RBI acts as a banker, debt manager, and financial advisor to the government, regulates foreign exchange and payment systems, and works to promote the development of the Indian economy through various institutions and policies.
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The document provides information about the Reserve Bank of India (RBI), which is India's central bank. It was established in 1934 and frames monetary policy. Some key points:
- RBI is among the top 10 most influential central banks globally based on GDP and other economic factors.
- It aims to maintain price stability and promote growth. The RBI Governor and committee determine the repo rate to influence monetary conditions.
- Tools include repo rate, CRR, OMOs and more to target inflation and ensure adequate credit in the economy.
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The document provides information about the Reserve Bank of India (RBI), which is India's central bank. It was established in 1934 and frames monetary policy. Some key points:
- RBI is among the top 10 most influential central banks globally based on GDP and other economic factors.
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This document discusses social banking and microfinance in India. It outlines the objectives of social banking as providing credit to small farmers, traders, and cottage industries. Major social banking schemes discussed include the Lead Bank Scheme, Service Area Approach, Village Adoption Scheme, and Differential Rate of Interest Scheme. The document also describes priority sector lending and microfinance through self-help group bank linkage programs. The Lead Bank Scheme designates a bank in each district to coordinate banking institutions. Under the Service Area Approach, banks are allocated specific rural or semi-urban villages.
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The document discusses the money market in India. It defines the money market and notes that it deals in short-term financial instruments that can be easily converted to cash. Some key aspects of the Indian money market discussed include the various sub-markets (e.g. call money market), instruments (e.g. treasury bills), participants (e.g. commercial banks), and the role of the money market in providing short-term funds and allowing central bank control of liquidity.
Central bank of india and its functions
The Reserve Bank of India (RBI) is the central bank of India. It was established in 1935 under the Reserve Bank of India Act and was nationalized in 1949. RBI occupies the highest position in India's monetary and banking system, regulating other banks and controlling the country's money supply and interest rates. As the lender of last resort, it aims to maintain price stability and a sound banking system through various monetary policy tools. Some of RBI's key functions include issuing currency, managing foreign exchange reserves, acting as both a commercial and development bank to the government, and supervising other banks.
Credit control method
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Fiscal policy refers to government spending and taxation policies that influence macroeconomic conditions and economic activity. The key instruments of fiscal policy include the government budget, taxation, public expenditure, and public debt. In India, fiscal policy aims to achieve objectives like economic development, employment generation, and price stability. Recent fiscal reforms have focused on simplifying taxes, reducing deficits, and increasing the tax-to-GDP ratio through measures like rationalizing subsidies and disinvesting public sector units.
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Fiscal deficit measures the incremental amounts that governments are required to borrow in order to finance their budget shortfalls. The concept has gained significance in recent times with the IMF imposing strict restrictions and monitoring of the levels of fiscal deficit that economies can run if they have taken support or are going to request support from the IMF. India too started to monitor Fiscal Deficit after it had to solicit support from the IMF to resolve the balance of payment crisis of 1991. This study traces the major changes in the India’s fiscal policy since 1980-81 through the country’s balance of payments crisis of 1991, the post economic liberalisation and high growth period, the introduction of FRBM Act in 2003, adjustment to the global financial crisis of 2008 and the recent post-crisis changes to return to a path of fiscal consolidation The study found that from 1980-81 to 2002-03 the periods of crisis led to the burgeoning of the deficit to unsustainable levels and prompted the government to introduce and adopt economic reforms to ensure that the deficit stood at more reasonable levels. However since 2003-04 the government has been more proactive and has undertaken fiscal policy reforms to ensure a steady reduction in fiscal deficit as a percentage of GDP leading to a more resilient economy.
PUBLIC FINANCE.pptx
Public Finance is one of the most crucial parts of public administration. Proper financial planning and execution is imperative for the development of the society. In the Indian context, it is Union Finance Ministry that deals with budget formation as well as financial service provisions. Hence, it is necessary to study the working of this ministry along with the operations of offices like CAG and Finance Commission to understand the pillars of Indian administration.
Economic time table
The document summarizes several upcoming economic events in India and their potential macroeconomic impacts. In August, the selection of a new RBI governor and the passage of GST could have both short-term negative and long-term positive effects on economic growth and inflation. The selection of members for the Monetary Policy Committee in August/September aims to reduce bias from external members. FCNR(B) redemptions from September/November may put slight pressure on the balance of payments but are expected to have a manageable impact. The increases in allowances from the 7th Pay Commission from October/November are projected to increase consumer price inflation and widen the fiscal deficit.
Economic time table
The document summarizes several upcoming economic events in India and their potential macroeconomic impacts. In August, the selection of a new RBI governor and the passage of GST could have both short-term negative and long-term positive effects on economic growth and inflation. The selection of members for the Monetary Policy Committee in August/September aims to reduce bias from external members. FCNR(B) redemptions from September/November may put slight pressure on the balance of payments but are expected to have a manageable impact. Allowance increases from the 7th Pay Commission from October/November are projected to increase consumer price inflation and widen the fiscal deficit.
Niti Brief #1
NITI BRIEFS is a series of documents created for dissemination of important policy matters. This is the first document in the series. It provides an overview of the National Development Agenda, Fourteenth Finance Commission and the Union Budget 2015-16.
33899.pptx
The document discusses the evolution of the financial services market in India and outlines key products offered. It describes how financial sector reforms since 1985 focused on technological innovations, productivity, and human resources. Major financial products discussed include saving and investment options, lending and credit services, banking, money transmission, life insurance, and general insurance. The regulation of financial services is also covered.
Inflation targeting group 7 section f_bc
1) The document discusses topics related to inflation targeting including what it is, why it is controversial, cross-country experiences, how to implement it, and recommendations for India.
2) Inflation targeting is a monetary policy strategy used by central banks to maintain inflation at a specific target level or range through interest rate changes and other monetary actions. It aims to improve transparency but may prioritize inflation over other goals like growth.
3) Implementing inflation targeting requires conditions like central bank independence, developed financial markets, and a flexible exchange rate - conditions many emerging economies like India currently lack.
Fiscal policy
This document defines and discusses fiscal policy in India. It begins by introducing fiscal policy and its objectives of stabilizing the economy. It then defines fiscal policy as involving government revenue collection through taxation and spending. The objectives and instruments of fiscal policy are outlined, including the budget, taxation, public expenditure, and public debt. Data on India's fiscal deficit is presented, showing it as a percentage of GDP from 2005-2014. The achievements and reforms of India's fiscal policy are highlighted, such as increasing resources and savings. The Fiscal Responsibility and Budget Management Act of 2003 is described as institutionalizing financial discipline and reducing deficits. Current fiscal policy targets reducing the deficit to 3% of GDP by 2017-2018.
Recent development
This document summarizes recent developments in the Indian banking sector. It discusses how total bank assets have grown substantially over the last decade to Rs 82,99,220 crore. It also notes that bank revenue and profits have increased significantly from 2001-2010. The growth has been driven by foreign investment and conservative RBI policies. Recent union budgets have proposed investments to capitalize banks and promote financial inclusion and agricultural lending. The banking sector is expected to continue growing in line with the strong projected growth of the Indian economy.
$$ Final indian finanacial system 2$
The Indian financial system underwent reforms in the early 1990s in response to a crisis where foreign exchange reserves had fallen dangerously low. The reforms led to high economic growth while maintaining price and financial stability. Reforms deregulated and liberalized the system, promoting greater competition and efficiency. The objectives were to create an efficient, competitive, and stable financial sector that could stimulate growth through improved resource allocation. This involved developing money, government securities, and foreign exchange markets to aid monetary policy transmission.
Second generation reforms in india ver 4
This document summarizes India's economic reforms that began in 1991 in response to a fiscal crisis. It describes how prior to reforms, India had a closed, licensed economy with slow growth. The reforms aimed to liberalize trade and investment. Key measures included cutting tariffs and import restrictions, encouraging foreign investment, and reducing the bureaucracy. The reforms accelerated GDP growth. However, issues remained around fiscal deficits, poverty reduction, uneven growth across regions, and sustaining growth impulses. Further "second generation" reforms were needed focused on competitiveness, infrastructure, education, and involving all economic sectors.
Economic policies - mba-
This document summarizes an assignment submitted on economic policy modules, including privatization, fiscal policy, and monetary policy in India. It discusses objectives and instruments of fiscal policy like taxation, public borrowing, and expenditure. It outlines the Raja Chelliah Committee recommendations on tax reforms and the objectives of monetary policy like growth, stability, and employment. Tools of monetary policy discussed include bank rate, cash reserve ratio, open market operations, and moral suasion.
Final Paper
This study analyzed the relationship between asset prices and economic growth in India. The researchers used data from India's major stock markets (BSE and NSE) to represent asset prices, and the Index of Industrial Production to represent economic growth. A rolling correlation analysis found the relationship between asset prices and growth varied over time and occasionally showed negative correlation. Regression analysis indicated a generally positive relationship, though shocks can cause variation. Periods of high volatility in the stock markets coincided with higher positive correlation between asset prices and economic growth.
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Chakravarthy commitee ppt
- 2. S Chakravarty committee was formed in 1985 under the chairmanship of professor sukhamoy Chakravarty The committee was set up to review the working of monetary system in India Its goal was to improve monitary regulation. a feat that was hoped would enables price stability The committee submitted its report in April 1985
- 3. During 1970 to 1980 the Indian economy had numerous issues relating to the functioning of monetary system Increase in the credit from the reserve bank of India to the government Increase in the statutory liquidity ratio maintained by the banks
- 4. Background As chakravarthy himself stated “ from the point of view of entering non inflationary planned development in the years to come ’’ monitory targeting The committee stated that average rate of interest does not increases not more than 4% per year in the sole price index How ever annual inflation was 8% , 9% , and 10% , during 1970 ,1990, and 1990 No rigidity in the monetary policy
- 5. Some of the drawbacks flexibility interest rates in chakravarthy committee Significant relaxation interest rate Encourages too much monetization of government debt Discourages effective use of credit by borrowers' Reduces profitability of banks and other financial institutions Interest rate calculation formula under chakravarthy committee i= r ( real rate of int + Pe ( pennal int )
- 6. Recommendations by committee A)Interest rate on government securities In this we can see 90% of them are tressury bills 30% of them are maturity bonds The fixed rate of interest 4.6% and from 1983 onwards government security demand declined B) Deposite rates of bank 1) deposite period more then 5 years Int = pe + r not less then 2% 2) One year deposite Int =one year pe + reasonable ( r )
- 7. 3) if deposite between 1 to 5 years Int = pe + r more then 2%