The document discusses the Reserve Bank of India Act of 1934 and its role in India's economic and banking system. It establishes the RBI as India's central bank, responsible for monetary policy and regulating commercial banks. The RBI Act of 1934 gives the RBI authority over currency and foreign exchange reserves, payment systems, providing banking services to the government, and achieving objectives like price stability and economic growth through monetary policy. Monetary policy involves managing money supply and interest rates to influence macroeconomic factors such as inflation, consumption, and growth.

1. RESERVE BANK OF INDIA ACT, 1934
SAAHIL NORONHA
ROLL NO – 85
BANKING SECTOR REFORMS -
THE RELATIONSHIP BETWEEN THE MONETARY POLICY AND
THE RESERVE BANK OF INDIA AS PARTICIPANTS
IN THE INDIAN ECONOMY AND BANKING SYSTEM
Hypothesis –

2. INTRODUCTION
• The Reserve Bank of India (RBI) Act of 1934 is a key component of India's
economic and banking system and is an important factor in the overall
functioning of the Indian economy.
• The Reserve Bank of India was set up on the basis of the recommendations
of the Hilton Young Commission. The Reserve Bank of India Act, of 1934
provides the statutory basis for the functioning of the Bank, which
commenced operations on April 1, 1935.
• The RBI Act of 1934 established the RBI as the central bank of India,
responsible for regulating the country's monetary policy, managing the
currency and credit system, and acting as a lender of last resort to
commercial banks.

3. THE RESERVE BANK OF INDIA ACT, 1934
- Some of the key provisions of the RBI Act 1934 include the following:
• Establishment of the Reserve Bank of India as the central bank of India.
• Regulation of commercial banks and other financial institutions.
• Management of India's currency and foreign exchange reserves.
• Conduct monetary policy to achieve price stability and promote economic
growth.
• Oversight of payment systems and settlement mechanisms.
• Provision of banking services to the Indian government and other public
bodies.

4. Sir C. D. Deshmukh
Shaktikanta Das

5. MONETARY POLICY
- What is monetary policy?
• Monetary policy refers to the actions taken by the central bank of a country to
control the supply and cost of money in the economy.
• It involves the management of money supply and interest rate and is the
demand side economic policy used by the government of a country to achieve
macroeconomic objectives like inflation, consumption, growth, and liquidity.
• In India, the monetary policy of the Reserve Bank of India is aimed at
managing the quantity of money to meet the requirements of different sectors
of the economy and to increase the pace of economic growth.

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