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
Thank You
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