This document discusses monetary policy in India as administered by the Reserve Bank of India (RBI). It provides background on the RBI, including noting that Dr. Raghuram Rajan is the current governor. It defines monetary policy and notes that RBI announces policy twice yearly to regulate price stability. The objectives of monetary policy are listed as economic growth, full employment, credit flow, price stability, and exchange rate stability. Both quantitative and qualitative tools are discussed, including repo and reverse repo rates, open market operations, cash reserve ratio, statutory liquidity ratio, bank rate, moral suasion, direct action, and regulating consumer credit. Current rates are provided.

1. Copyright © Wondershare Software
Presented By :
Chetan Jadav
Mahipat Chitra
Hitesh Parmar

2. CD Deshmukh
The First Indian Governor of
Reserve Bank of India (RBI)
Dr. Raghuram Rajan
Present Governer of
Reserve Bank of India (RBI)

3. Monetary policy- Meaning
The part of the economic policy
which regulates the level of money
in the economy in order to achieve
certain objectives.
In INDIA,RBI controls the
monetary policy. It is announced
twice a year, through which
RBI,regulate the price stability for
the economy.
1.slack season policy April-September
2.Busy season policy October-March

4. ∫Economic Growth
∫Full Employment
∫Flow of credit in all sectors of economy
∫Price Stability
∫Exchange rate stability
OBJECTIVES

6. Repo
Rate
LOAN TAKER =
BANK
Reverse
Repo Rate
LOAN TAKER =
RBI
Quantitative measures

7. Bank rate
Open market operations
Cash reserve ratio (CRR)
Statutory liquidity ratio (SLR)
Quantitative measures

8. Quantitative measures
Bank rate :
Bank Rate is the rate at which central bank of
the country (in India it is RBI) allows finance to
commercial banks. Bank Rate is a tool, which
central bank uses for short-term purposes.

9. Open market operations
Quantitative measures
An open market operation (also
known as OMO) is an activity by a
central bank to buy or sell government
bonds on the open market.

10. Cash reserve ratio (CRR)
Quantitative measures
This serves two purposes. It
ensures that a portion of
bank deposits is totally risk-
free.
It enables that RBI control
liquidity in the system, and
thereby, inflation by tying
their hands in lending
money
Always stands between 3 %
to 15 %

11. Ω Moral Suasion
Ω Direct Action
Ω Regulation in consumer credit
Qualitative Measures

12. REGULATION IN CONSUMER CREDIT
Qualitative Measures
most of the consumer durables like T.V.,
Refrigerator, Motorcar, etc. are available on
installment basis.
If there is excess demand for certain consumer
durables leading to their high prices, central bank
can reduce consumer credit by (a) increasing down
payment, and (b) reducing the number of
installments of repayment of such credit.

13. DIRECT ACTION
Qualitative Measures
This method is adopted when a
commercial bank does not co-operate
the central bank in achieving its desirable
objectives.

14. MORAL SUASION
Qualitative Measures
To arrest inflationary situation central bank persuades and request the commercial
banks to refrain from giving loans for speculative and non-essential purposes.
On the other hand, to counteract deflation central bank pursuades
the commercial banks to extend credit for different purposes.

15. IF :
Bank Rate
Bank Rate

16. CRR/SLR
CRR/SLR

17. •9.00% (28 jan 2014)Bank Rate
•4.00% (9 feb 2013)CRR
•23% (11 aug 2012)SLR
•8.00% (28 jan 2012)Repo Rate
•7.00% (28 jan 2012)Reverse Repo Rate
•61.19% (on March 2014)Re/$
Current Rates

18. CASE STUDY
CORRECTIVE STEPS
TAKEN TO STABILIZE
EXCHANGE RATE ( RS ).

19. Use Indian product.
Avoid meeting in five star hotel.
Avoid foreign tour.
Come out idol money balance in
market .