banking service chronicle magazine

banking service chronicle magazine

banking service chronicle magazine published this article page no  30 functions the mpc is entrusted with the responsibility of deciding the different policy rates including msf repo rate reverse repo rate and liquidity adjustment facility. composition of mpc the committee will have six members. of the six members the government will nominate three. no government official will be nominated to the mpc. the other three members would be from the rbi with the governor being the exofficio chairperson. deputy governor of rbi in charge of the monetary policy will be a member as also an executive director of the central bank. selection and term of members selection the government nominees to the mpc will be selected by a searchcumselection committee under cabinet secretary with rbi governor and economic affairs secretary and three experts in the field of economics or banking or finance or monetary policy as its members. term members of the mpc will be appointed for a period of four years and shall not be eligible for reappointment. how decisions are made? decisions will be taken by majority vote with each member having a vote. rbi governors role the rbi governor will chair the committee. the governor however will not enjoy a veto power to overrule the other panel members but will have a casting vote in case of a tie. what is rbi monetary policy? the term monetary policy is the reserve bank of indias policy pertaining to the deployment of monetary resources under its control for the purpose of achieving gdp growth and lowering the inflation rate. the reserve bank of india act 1934 empowers the rbi to make the monetary policy. what the monetary policy intends to achieve? as per the suggestions made by chakravarty committee aspects such as price stability economic growth equity social justice and encouraging the growth of new financial enterprises are some crucial roles connected to the monetary policy of india. while the government of india tries to accelerate the gdp growth rate of india the rbi keeps trying to bring down the rate of inflation within a sustainable limit.118in order to achieve its main objectives the monetary policy committee determines the ideal policy interest rate that will help achieve the inflation target in front of the country. monetary policy instruments and how they are managed? monetary policy instruments are of two types namely qualitative instruments and quantitative instruments. the list of quantitative instruments include open market operations bank rate repo rate reverse repo rate cash reserve ratio statutory liquidity ratio marginal standing facility and liquidity adjustment facility (laf). qualitative instruments refer to direct action change in the margin money and moral suasion banking service chronicle magazine buy

banking service chronicle magazine