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rbi ppt

Uploaded by

mariyasiddiqui.s19
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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RBI Monetary Policy

Framework
This presentation explores the RBI's monetary policy framework.

Narasimhan committeeI &


II
Also, we will examine the Narasimhan Committee's reforms impact.
MEET OUR

TEAM OF MCOM SEM II


AISHA ALAM
24CMMCA101
SADAF TOHID
24CMMCA110

MARIYA MUSKAN FIROZ


SUBJECT: IFS
SIDDIQUI
24CMMCA111 24CMMCA129

TO: LAMAAN MAAM


Introduction to RBI Monetary Policy
What is Monetary Role of RBI Policy Instruments
Policy?
Central bank controls money Regulates inflation, promotes Includes repo rate, CRR, SLR, and
supply and interest rates to growth, and ensures financial open market operations.
stabilize economy. stability.
Objectives of RBI's
Monetary
Price Stability Policy
Keep inflation within target range for economic certainty.

Growth Promotion
Support sustainable economic growth and employment generation.

Financial Stability
Ensure smooth functioning of banking and financial systems.
Quantitative and Qualitative
Monetary Policies Qualitative
Quantitative Instruments
Instruments
• Repo and reverse repo rates • Margin requirements
• Cash Reserve Ratio (CRR) • Credit rationing
• Statutory Liquidity Ratio (SLR) • Selective credit controls
• Open Market Operations • Moral suasion
Current Monetary Policy
Stance
Accommodative Inflation Targeting
Approach
Focus on supporting Maintaining forecasted
economic recovery post- inflation within 4% with a
pandemic disruption. 2% margin.

Liquidity
Management
Ensuring adequate liquidity while managing system risks.
Narasimhan Committee: Overview

The Narasimhan Committee was established to reform India's banking


sector.
Its recommendations shaped modern banking regulations and policy
frameworks.
The Narasimhan Committee
I (1991)1 2 3

Focus on Financial Capital Adequacy Non-Performing


Health Norms Assets
Emphasized improving bank Pushed for maintaining minimum Introduced strict provisioning to
profitability and asset quality. capital requirements for banks. tackle bad loans.
Narasimhan Committee I:
Banking Sector Reforms
Autonomy to Banks
Reduced government control for efficient operations.

Interest Rate
Deregulation
Allowed banks to set rates based on market conditions.

Improved
Supervision
Strengthened RBI's regulatory oversight capabilities.

Encouraged
Competition
Promoted entry of new private and foreign banks.
The Narasimhan Committee II
(1998)
Bank Consolidation
1
Recommended mergers for stronger and efficient banks.

2 Asset Quality
Improvement
Suggested stricter norms for provisioning and capital
management.

3 Technology
Adoption
Emphasized modern IT systems for better banking services.

Corporate
4 Governance
Called for transparent management and accountability.
Criticism of Narasimhan
Committee Recommendations
Employment
Concerns
Reforms led to job losses due to bank mergers and automation.

Small Bank
Marginalization
Smaller banks feared losing market share to bigger players.

Credit Accessibility
Increased prudential norms possibly tightened credit to small borrowers.

Implementation
Challenges
Some recommendations were slow to be executed or modified.

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