Topic 6.pptx - Central Bank Monetary Policy Need for...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Central Bank & Monetary Policy
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Need for Regulations Regulations are needed to ensure that the investors are protected; that disclosure and access to information are adequate, timely and equal; that the participants follow the rules of the market; and that the markets are both fair and efficient
Image of page 2
The Indian Regulatory Authorities Fixed deposits and other banking products are regulated by the RBI Mutual funds and equity markets by the Securities and Exchange Board of India Insurance by the Insurance Regulatory Development Authority of India (IRDA) The New Pension Scheme (NPS) by the Pension Fund Regulatory and Development Authority (PFRDA), and The forward markets by the Forward Market Commission (FMC) under the supervision of the Ministry of Finance, Government of India. FMC got merged with SEBI on Sep 28, 2015.
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Reserve Bank of India India’s central bank, the central monetary authority Established on April 1, 1935 (privately owned) Nationalized in 1949 Preamble - “… to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”
Image of page 4
Functions of RBI To maintain monetary stability To maintain financial stability and ensure sound financial institutions To maintain stable payment systems To promote the development of financial infrastructure in terms of markets and systems To ensure credit allocation according to national economic priorities and social concerns To regulate overall volume of money and credit in the economy
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Roles of RBI Note Issuing Authority Government’s Banker - provide all banking services to the central and state governments such as acceptance of deposits, withdrawal of funds, making payments, receiving payments, managements of public debt and so on Ways and Means Advances (WAMAs) - temporary loans for a maximum maturity of three months SDF, Normal WAMAs and Overdraft facilities Bankers’ Bank - controls the volume of banks’ reserves and their ability to create credits. It also acts as the lender of the last resort
Image of page 6
Roles of RBI Supervising Authority - provides the broad parameters within which the banks and the financial system function issue of licenses for new banks/bank branches prescription of minimum requirements of reserves, liquid assets etc.
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern