RBI & Policy
Economics · RBI और नीति · 22 facts
RBI established on 1 April 1935 on recommendation of Hilton Young Commission (1926)
RBI was nationalized on 1 January 1949 under RBI Transfer to Public Ownership Act
RBI HQ is in Mumbai; first Governor was Sir Osborne Smith (British)
C.D. Deshmukh was the FIRST Indian Governor of RBI
RBI prints all currency notes EXCEPT Re 1 note — issued by Ministry of Finance
All coins in India are minted by Government of India, NOT by RBI
CRR: % of deposits banks MUST keep with RBI as cash — earns NO interest
SLR: % of deposits bank keeps itself in gold, cash or govt securities
KEY DIFFERENCE: CRR kept WITH RBI; SLR kept WITH the bank itself
Repo Rate: rate at which RBI lends short-term money to commercial banks
Reverse Repo: rate at which RBI borrows money FROM commercial banks
Bank Rate: RBI long-term lending rate to banks — NO collateral required
MSF: emergency borrowing facility for banks, always 0.25% above Repo Rate
MPC has 6 members (3 RBI + 3 Govt); RBI Governor chairs with casting vote
MPC inflation target: CPI at 4% with +/-2% band (range 2% to 6%)
OMO: RBI buys/sells govt securities in open market to control money supply
LAF includes both Repo and Reverse Repo operations of RBI
RBI is Banker to Government — manages govt accounts and public debt
RBI is Lender of Last Resort — gives emergency loans to banks
RBI manages India foreign exchange (FOREX) reserves
Note printing presses: Dewas (MP), Nasik (MH), Mysuru (KA), Salboni (WB)
Indian currency notes carry 15 languages on back + Hindi & English on front