Role of Reserve Bank of India in Economic Development
-
Upload
mohammad-imad-shahid-khan -
Category
Economy & Finance
-
view
259 -
download
2
description
Transcript of Role of Reserve Bank of India in Economic Development
![Page 1: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/1.jpg)
1
Role of Reserve Bank of India in Economic Development
A Macroeconomics for Business Presentation by
Imad Shahid Khan
Section A, 2nd Semester, Bachelor of Business Management (2013-2016)
![Page 2: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/2.jpg)
2 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.”
![Page 3: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/3.jpg)
3
What is meant by the RBI’s role in the Economic
Development?
This role refers to the development of the quality of banking system in India and ensuring that credit is available to the productive sectors of the economy.
![Page 4: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/4.jpg)
4 Roles of RBI in the Indian Economic Development
Development of Banking System Development of Financial Institutions Development of Impoverished Regions Economic Stability Economic Growth Appropriate Interest rate structure Miscellaneous
![Page 5: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/5.jpg)
5 Development of Banking System
Granting license to banks. Inspect and make enquiry or determine position
in respect of matters under various sections of RBI and Banking Regulation Act.
Periodical review of the work of commercial banks.
Giving directives to commercial banks. Control the NBFIs. Ensuring the health of financial system through
on-site and off-site verifications.
![Page 6: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/6.jpg)
6
![Page 7: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/7.jpg)
7 Development of Financial Institutions
Reserve Bank of India’s role also includes establishing institutions designed to build the country’s financial infrastructure as well as regulate them. Export - Import Bank of India (Exim Bank); National Bank for Agriculture and Rural Development (NABARD); Small Industries Development Bank of India (SIDBI); National Housing Bank (NHB) are some of them.
![Page 8: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/8.jpg)
8
![Page 9: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/9.jpg)
9 Development of Impoverished Regions
The RBI has proactively promoted the initiative of establishing banking as well as many financial schemes and infrastructure in the otherwise ignored regions.
Access to affordable financial services and promoting financial education and literacy and inculcating banking habits among the rural mass.
![Page 10: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/10.jpg)
10
![Page 11: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/11.jpg)
11 Economic Stability
Reserve Bank of India is responsible for the stability of the economy and combats issues like Inflation, Recession, Currency devaluation, through various Monetary policies.
RBI achieves this using various tools like Bank rate, Rep Rate, Reverse Repo Rate, CRR, SLR, etc
![Page 12: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/12.jpg)
12
![Page 13: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/13.jpg)
13 Appropriate Interest rate structure
the cost of borrowing is determined by where the Reserve Bank of India sets its interest rates and ultimately consumer behaviour will determine how the overall demand in the economy is.
So, both through direct channels on money supply as well as through indirect channels through the interest rate setting behaviour, the Reserve Bank of India determines what should be the interest rate that a commercial banks sets and therefore in that process determine how consumers actually behave.
![Page 14: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/14.jpg)
14
![Page 15: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/15.jpg)
15 Economic Growth
Traditionally, RBI’s monetary policy was focused on controlling inflation through contraction of money supply and credit. This resulted in poor growth performance.
Thus, RBI have now adopted the policy of ‘Growth with Stability’. This means sufficient credit will be available for growing needs of different sectors of economy and at the same time, inflation will be controlled with in a certain limit.
![Page 16: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/16.jpg)
16
![Page 17: Role of Reserve Bank of India in Economic Development](https://reader036.fdocuments.us/reader036/viewer/2022081602/54c5ba844a7959b8388b46ff/html5/thumbnails/17.jpg)
“
”
-