Classification of MONEY by RBI

Manoj Basniwal - 03Rohil Sanil - 39Kamlesh Sharma - 44

Classification of MONEY done by RBI in 1979

M0 (Reserve money)M1 (Narrow money)M2M3 (Broad money)M4

M0 (Reserve Money) Currency in circulation + Bankers’ deposits with the

RBI + ‘Other’ deposits with the RBI = Net RBI credit to the Government + RBI credit to the

commercial sector + RBI’s claims on banks + RBI’s net foreign assets + Government’s currency liabilities to the public – RBI’s net non-monetary liabilities.

M 1

Money with public

Demand deposit with Bank

Other deposits with RBI

M 1Post office savings deposits

M 2

M 1Time deposit with Bank

M 3

M 3Total Post office deposits

M 4

M1Currency with the public + Deposit money of the

public (Demand deposits with the banking system + ‘Other’ deposits with the RBI).

M2M1 + Post office savings deposits

M3M1+ Time deposits with the banking system

M4M3 + All deposits with post office

Redefined classification of MoneyM1 : Currency in circulation+ Demand deposits + other

deposits with RBIM2 : M1 + time liabilities portion of saving deposits with

banks + certificates of deposits issued by banksM3 : M2 + term deposits with bank with maturity over

one year + Call/ term borrowing of the banking systemM4 has been excluded from the scheme of monetary

aggregates

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