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lR$ ^l>>?
l$VS$ PZ MSMS$ t ]l
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^l MS-Z -l -MS- {lMS ]l.
sZ _{l--Q]l, Xl, rMS, ]ll,
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l MS-MS$ ]l-Ol$]l * -$ S-Ol$
Es. sZ g]l-l MS$ {l-MS-Ol$-]l. G
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^ g]l-l MS$ CM> i-]lV> E.
MS]l$-]l$-$-OVS]l MS-*- {MS {`]l
-lZ MS.

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(gGl).. r $l Ayl {r
H$l tylZ VSt MSt $tMS$: O 29
V>ylz hZ l$s M>l B
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Cl{$tl$s l$M>MS, $ t,
$ Br, ylh l$M>MS, Ol$VS l$s
$t lR$MS$ _]l l: BVS$t 10

g]l-l MS- *--]l$ lyl$ M>-$V> -h-^$

1) MS-V>-$ 2) r-MS$ {l--]l$ 3) -V>-l-$
4) MS$ #>-$ 5) - MS-$ 6) r MSl$
7) C{l-g (V>--yl) MS$

Es. MS -* As MS]l MS-M>-$$ C^la {l-]l

]l*{ll$ M>l$. sZ MS-M>yl, B^ ]l]l-->$, Xl,
Nf, ]lr]l, {l-]l, r$ VS. -V>-l-/-#-> -V>-l$
B--^lyl, {S-MS$- ]l*-Z-_-^lyl, -^lyl l-l A>$ MS*y $-lOl$ Es. D Z MS*- Al-$]l ^l$-y-MS >- $- B
^l$-M-. A#yl g]l-l MS- {-l-]l A]l-VS-l-]l$-]l#-l$.
]lyl$ l>- {MSl ]l$_ g]l-l MS {l-]l -Z-l]l,
Al-$-Z ]l*$--^a. {l-]l - lMS-l
g]l-l MS-]l$ ^l*ylr ll-O. D {l--]lZ V>]l --u>(--y sMt-) ]l*-hMS, MS$, ]l$l, ]l$-Ol-gq-MS lt
--]l ^l*-l BZ-^l]l ll-O.

9) l MS$

10) {V>$ {l--]l$ 11) Al-^l MS$ 12) r MSl$

r MSl$
$VS$ ]l$_ Hyl$ VSg ]l[O _{-_]l ]l$-
*--_]l _{-]l$ ^l*#l* MSl ^l$-$. s
$P-MS ]l$--l$yl$ l- `- MSl-$V> P-yl$. M>
g-MS l -`- MSl V-MS -$l. C-sMS B MSl]l$
*l-]l#-MS {l-MSV> {l--$. D {l--MS$$ l-V>,
MS-V>-{lZ E$. MS~- MSl, M>r$MS >k MSl sZ
_{-lOl$ Er$. MS*y r MSl -VSZ ^la]l^l$a. $]l*$ 13 M> r MSl-$-. Cl$Z JMSs
$]l A MS$ #>-. ]l-VS--Z M>r-]l$->k MSl
^l ]l$l--^l$a l ]ll *O H {MSl s r
E. $ D s {l-* MSl]l$ ^l$-$.
s$ yl$ M>$. JMSs $]l# r, y Aylz
r. VSlZ G]l$ H MS s l$-M-Z $]l$
E. >]l$->]l$ s$ X ]lM> _{l-M>-$$ l$-$-r$ st D $-]l* AlV> s-^lyl l$. M]l-$ ]l*{l l$ l MS-M> {--$Z s$
X-^l$-MS$-l-$. {$l B _{l-M>-$ MS$r$
l*$ l---. AMSP-ylMS$ l s$ l*$
^l-^l$-MS$-r$-$. D s$ l {-$ _{l-M>$$ lWY--*$. Ml l _{l-M>-$$ Ml$ l$-yMS l--yl$-l$-$.

{VS*
{lMS

MS- *-$ g]l-l P-Z yl--$-> VSV>

8) { MS-$

C{l-g MS$

g -#->, VS${ MSl, ylVS $]l MSl l-l V>l-]l$

]l*-hMS A>-$]l MS- *--$V> ^l-]l^l$a. Cs MSl-$-/-V>]l
u> M Al--$-$. ^-{lMS {]l E]l - V>-l
M -Z--$-$. B-- h-Z "- l MSl-']l$ D
lV> -Ol$]l ^-{lMS MSlV> ^l#-M-]l^l$a. l Al -MS$yl$
rt- _, l]l >f--V> ^l$-M-yl$. Clyl$
g]l$ G--^yl$. M> _]l-MS$ g ^lZ Kyl--*yl$. Cs
MSl ]l l-V> ^l-{l-Z MS--r]l$ N_ ]l${VS ^l{l >-MS -]l#-l$.
g]l-l MS-]l$ lyl$ M>-$V> -h-^l-]l^l$a. MS *,
* st VSlZ M ]lY-MS--$ f-V>. M> M>-{MS-]l$Z
MlV> ^l]l MS -*- {l-MSl ]l ]l*l]l ]lY-MS- A---Ol$.
* --]l$ st MS-*--]l$ JMS-^r ^l>a$. s
S$V> ---_]l l>l -V> V> GMS ^l>$. g]l-l
MS-]l$ ]lY-MS--^lyl MSt. M> MS-* ]l - st
H VS MSl ^l>aZ ~--]l-^l^l$a. ]lyl$ ]l$_ I-$ VSg
yl]l#, lyl$ Eyl s-$-. A-s l-V>-Z $]l*$
lyl$ E. s "r MSl-$' A]l-]l^l$a. M> MS$ #>-
MS-*- -f-]lZ M l->Z s P-
]l$. Al l#-M>l$. B MS-* A]l-V>-]l
]l$l tl Ml$ A -^.
MS- *--]l$ ]l$l, MS$ V> -h^$. M g]l-l MS-]l$ Al* {l-^l-MS*-yl-ll $]l$ E. s Ml$
]l*{ll$ S-^. l MS$ l Cl
E-MS$--/-B-{l MS$$ ^l #>--]l$
A-V> ]l$]l ]l MS$-- ^l.
Cl-$$ ^l-y-MS l$. ]l MS$
$ MS*y A {Z, A {V>]l*Z
^l->l$. MS]l MS MS$P/$>-V>
C_a]l F-Zl ^l. B lV> Q>-O]l
$]l*$ ]lO {V>]l*-Zl $ l]l$ MS
MS$-MS$ MSl-$-/-{-l--]l$ {l-_ ]ll
--MS $-M- Er$. C
JMS ]l*-hMS $]l$. A-V> ]l$]l {-$.
l E -MS $ ]l]l B{l MS$ ]l]l As$. ]ll
>W >-$, M>Wl >l-{-l$$, s$, MS^l$ {VS-$ ll-O]l Es. sZ B* MS$ MS-*- ]l->$
l N-MSV> -. C g]l-l MS Al-$--MS
E-MS--. Cs ]l${W E]l s MS*y D -f-]lZ
^l*-]l^l$a.

MS-V>-$

s yl$ M>-$V> -h-^$. A.. l-V>]l MS$, HMS ]lMS -V>]l MS$.
l-V>]l MS$: l ]l {l-]l C* yl MSl$ l-V>]l
MS$. D -VSZ B$-VS$$ Al MSs GMS$P]l ]l$ MS-M>-$$ MS yl$. ]lVS$Y$ ]l*{l l--. {]l $-MS$yl$ X-l- l -$s,
Cl$ {$ ^l-Ol# Eyl yl-$. l- V>]l MSZ JMSl {l-]l MS--_
{-]lV> MS-V>-]ll$ A-MSV> Er$. fVS MSl$, >l MSl$, Oyl,
f]lMS$ MSl-MS$$ B-^l ]ll- MSl$ (- l, s -V>l, MS$r >$-ylz, > yl$, ylVS $]l ll-O-]l-) D M]lMS
^ll$-.
HMS-]lMS V>]l-MS-$: D MSZ JMS ]lMS A Ol ]l]l---yl$. X-l --$ yl$. -MSl MS-M>-$ ]l*-V> A {l$ l -yl$. HMS-M>-Z yl$
]lyl$ Xl -$ -yl$. Cl$MS$ E---V> l-V>--Z
l$$ -MS-l]l$ P-^l$a. $ JMP-MSP$ ]lyl$ k--r$ MSl]l$ --$.

l$VS$ lO E]l { MS$-MS JMS MSl MS-$. D MSl #>-V> ]l*. A ]l*yl ]l
Ol]l ]l]l, -{ll ^lMS*-. D MSl-MS$ {lMSV> VS$$ {--* H->a$. D VS$$-]l#
#> {]l-^l]l ^l$. {$l ]l*]l M> A]l$-_ MS]l$ {l--$-$. D {l--]l$ MS]l
l MS$-MS -$l. Cl-$$ D {l--]l-]l$
S-^l-y-MS $-yll$. Al$MS s "--$l {l]l MS-$' A MS*y A]l-]l^l$a. C-s $]l*$ 30
]lMS$ MS--. g -#->, Vyl-gst, H]l*s,
yl--l, MS*]l-#, VSh-MS*s, r-$, Al
MSl$ ll-O]l s E---V> P-]l-]l^l$a.

sl MS-MSr$t, V>yl l--s$. f l*-W-^l-yMS M>MS$y l, Ba MS-W-^lyl M g]l-l {l-]l ]l$lZ _]l D l]l$ {l--$. Al$
k JVS$Y -MS-lZ _]l k D MS-MSr$t l]l$ {l--$.
V>yl l-]l$ {l-MSV> A M> {f-MS$ {l-^l
*$ MS*y M E. V>yl, M>s--$, { l$$, l-]l$--$, l--*-$$, VSs l--$ {lMSV> D l]l$ {l--$. D {l--]lZ V>]l Eyll$.
M> JMS MS-Ol$]l Xl --]l$ E-*-W-$. D {l-]l-]l$ GMS$P-]lV> MS$r$ S ]l l {l-$. l-]l$ $ l*, ]l-]l$ sZ_ $.
C S ]l l A]l#-l$. Al-V> ]l${l l{$
H Eyl]l#.
g]l-l C{l-g l NV> -Y-ll$. t C{l-g
l {l-^l ]l$-$Z JMS Ol l_ Er$.
$VS ]lyl$- Ol-#$ ]l-l-$. D C{l-g {l-]lZ l--*-$-]l$ {l-MS_ ^l#-M-. $ l]l$
l]l$ ]lyl$ VSr--r$ {l-_ Ba ^lMS-l$-]l$
^l$.

MS$ #>-$

r-MS$ {l--]l$

{ MS$

MS V>]l {]l M>MS$y MSl]l$ {lMS l-Z {l--^lyl rMS$ MSV> ^l^l$a. g-MS D MS-]l$ VSlZ $S-V>-$, r-M>- ^l-$. #> MSl-MS$ MS$ #>--]l$ {l--]lV> ]l$_ {S-MS$]l$ BMS-r$t-MS$-r$-$. VSl ]lO H ]l$_ g -#->
, M$--]l$ MSl$, u>$ Ml {l-]l l-ZMS ]l*>. M>st D -V> $S-V>-$
A]l-MS$y r-MS$ {l--]l- $-$-$.
Cl$MS$ E---V> _l$, Vl, ^l^l$-rMS, V -MS- ll-O]l s P-]l]l^l$a.

g]l-l MS--VSZ {MS$ ^l]l {lMS MS-*-$

lMS$Pl. M> {l$$ MS-*-$ MS*y ^
lMS$P]l. MS-* {l--]lZ MS$r$ ll Y-r$.
g]l-l MS-]l$ {l--^l-$ {$, $, $-->-l$-
^l--$-s$. Cl$M { GMS$P-]lV> {$-$. P-MSV> H>r$ ^l$-MS$]l VS$y-> ]ll, Ml {l-Z, ^l$ ]lMS$ ]l$l ]lr ^l$yl, $-]l# l$yl
ll-O]l ]l$$ ^l$. {l-]l ]l$-$Z Xl ]l$ MS*y -$. ]ll yl-$. MS-M>-$-MS$ -$MS$-$V> Es$. MS-{MS]l$ ll -^l-$. >l MSlZ
#$-$yl$ {]l MSl-MS$yl$. {$ VS$l$-r$ * C$-Ol# ]ll$ yl-$.
{$ {l-MSV> ylz]l$, l$-MS]l$, V s yl$-VS
l-Z ]l$ ^l$. Br, r$ {l-MS-Ol$]l. sZ #$-$ {l$$ A$ Eyll$. #$$MS$
l*V> {$ ]ll ^l$. {$ r$ yl$-M-]l-yMS ^ l->$ E. M> ]l$ ^l MS-*$ lMS$Pl. l$-MS]l$ ]l ]l-Vyl, ]l-VS
hZ ll >{l$Z ^l$r$t-M>-]lyl$
]llV> Byl-$.

-V>-l$
sZ ^-{lMS V>l$, At ^-{lMS V>-l$ A yl$ M>-$-. yl- st
-V>-l$, -V>-l$ MS*y Es
. C ]l$yl---$$, >k$, ^l{MS-]l-$
^l{l , {]l$ >-Z, l {VSZ SOl$ E. >k AMS--]l$ G-_
{f >]l -_]l $$ MS*y ^ ]l$
E$. {MS ^ ]lMS$ {VSZ MS--^ll$.
M> {f gq-M>Z, s l {{MS-$Z ]ll*Ol
Er$. D P-MS $ >-s-]l$ _{-^ll -V>-l$.
D V>l-]l$ yl$-M-]l-y-MS B* MS$--$ Cl V>$-MS$$ {l-MSV>
Es$. Al$-]l C lsMS _ E. *Y Myl >yl$, - MSl, M]l-- M>r-]l$->k MSl ll-O]l s -V>-l-MS$ E--V> P-]l-]l^l$a.

- MS$
]l$l, MS$, MS-M>-ylMS$ -_ M>MS$y MS]l
l M, P--MSV> A ]l>Y$, MS$
M {l-^l MS-]l$ "-- MS-$' As$.
s Al* S-$. sZ , Al$l,
l {-]lV> -MS---yl$-. VSW-yl$,
M]l$---$$, M>s-M>--$$, VSs VS-]l-l$$,
yl#, V>yl, f-]l-]l$ Cl$MS$ E---V> P-]l]l^l$a. D MS-]l$ {l--^l-$ {V>]l$Z MS*yl-
G]l$-MS$-s$. ]ll-$V> G]l A]l$-]l$ $-M-]l A]l- l$. {S-MS$$ AMSP-yl-MSPyl l]l$MS$ _]ll C$. MS$, ]l$l $ MS$y {V>$ {f B]l-^l MS-$V> s ^l#-M-]l^l$a.

f$ $]l$ >]l#
MS, ZlMS$$

Monetary and Credit Policy

Definition
1. The strategy of influencing
movements of the money supply
and interest rates to affect output
and inflation.
2. The actions of a central bank that
determine the size and rate of
growth of the money supply which
in turn affects interest rates.
3. A macro-economic policy tool used
to influence interest rates, inflation,
and credit availability through
changes in the supply of money
available in the economy.
To what extent is MP (Monetary policy)
independent of FP (Fiscal policy)?
When the government doesnt have
enough money to fund the projects,
RBI sells G-Secs on behalf of
government to banks.
RBI has a tool called SLR, which
means banks have to compulsory
keep certain percentage of their
money in G-Sec or bonds whether
they like it or not.
If there is no SLR, banks may or may
not be interested in purchasing them.
In addition to control inflation, the
SLR has become an instrument in
the hands of the government to
mobilize resources in support of the
central and state budget.

Objectives of Monetary Policy

There are more or less similar to
objectives of Five Year Plan.
Mainly for growth, stability and
social justice.
1. Rapid economic growth

1
2
3
4
5
6
7
8
9

2. Price stability
3. Exchange rate stabilization
4. Balance of Payment (BOP)
equilibrium
5. Generating employment
opportunities
6. Neutrality of money
7. Involving banks in achieving
goals of planning
8. Equal income distribution and
social justice
9. Inclusive growth
10. Regulating bank credit.

3 Stages of MP in India
1. 1952-1972 ----Controlled
expansion method
2. 1972-1991 ----Reduction method
3. After 1991 -----Expansion method
Controls/Tools of MPs
Two types
1. Quantitative control
2. Qualitative control
Quantitative
Qualitative
Directed towards Used to
the quantity of discriminate
credit or the use between different
of the credit.
uses of credit.

Types of MP
Expansionary MP Contractionary

Cheap MP
Sulabha MP
By increasing
Money supply
Used to combat
unemployment
in a recession by
lowering interest
rates

Hard

MP

MP
Khatina MP
By reducing
Money circulation
Goal of raising
interest rates to
combat inflation

These methods
can have influence
over the lender
and borrower of
the credit.
Quantitative instruments/control

Also known as General tools of MP

These tools are related to the

quantity or volume of the money
and designed to regulate or control

the total volume of bank credit in

the economy.
BR
Bank Rate
CRR Cash Reserve Ratio
SLR Statutory Liquidity Ratio
OMO Open Market Operations
DF
Deficit Financing
RR
Repo Rate
RRR Reverse Repo rate
MSFR Marginal Standing Facility
Rate
PSL
Priority Sector Lending

Qualitative control/instrument
1. Publicity
2. Rationing of Credit
3. Regulation of Consumer Credit
4. Moral Suasion
5. Variation in Margin Requirements
6. Selective Credit Control
Note: SLR will be considered as both
quantitative and qualitative tools.

M>ss MlV
{VS* -SZ Cl--MS$ _ Gs {$ ]l?
& h. VS $, VS$r*$

Competitive Guidance

H s S A GV>j-$-]l ]l$Z
l---V> l$ A Cl-$. ]lr
^l$-MS$V> E-*-W^l yl-MS$, MS ll$-M Gi, V V> ]ls Cl. --V> {sZ, MS-, ylh
l-l {l]l Cl-$ Gi, G-i
]ls Cl--MS$ B {sZ$. {MS*y B-]l$ "-SMS AMS l]l' l-Z O-]l-Z $-^l ]l*P-sZMS
yl$-l ^l$. s -SZ D {{MS-$MS$
--_]l {---r$ l E~-{VSl ]ll H$ A]l$-$-r-M>$ ]l* AylVS
A]l-M> E. l Cl--Z $]l -> VS$_ MS*y Ayl-VS-]l^l$a.
--V> H Cl-]l-Ol$ l O{y-M>]l ${]l$. E---MS$ G-iZ
{]l A]l$-$-rMS (*-s-), f
-]l#Z Eyl {]l ]l# ($-l). Cl-M>-MS$y i]l ]l> ]l$_ l*-$ *-V>. yl ]l$_ l*--$
V V>. yl-sZ]l* {]l A]l$-$rMS $l. C]l O{y-M>--. s
]l$yl-_-]l-#yl$ M> Oyl BMSy, s B
l$-]l-yl-. >MS-rZ lMS$P]l $-]l#yl
GMS$P]l MS-^la Cl-$ A]l-. {l]l
O{y-f ]l$_ Cl]l. CMS { {V>]lMS
Gl MS--$-ll $ B Cl]l ]l$> l-$-g-$. lMS GMS$P]l MSZ--M
$]l Es ]l$ AMS. Cl-O D l {$ Ayl$-VS$-$. AVS
O{y-M>-]l VS$_ -lV> ^ll-.

Indian Economy
2. Bank rate is the rate at which the
RBI re-discounts bill of exchange or
other commercial papers.
Note: RBI said that it aligned the
bank rate with Marginal Standing
facility (MSF) rate which in turn is
linked to the policy repo rate. Being
the discount rate, the bank rate should
technically be higher than the policy
repo rate.
Adjustment of bank rate by RBI
during inflation and deflation
During inflation: RBI increases bank
rate which reduces liquidity in market
than controls inflation.
During deflation: RBI decreases bank
rate which increases liquidity in
market than controls deflation.

RBI-Bank related rates as on 2016

Type
Policy rate

Reserving ratios
Lending
deposits rates

Name
BR
RR
RRR
MSFR
CRR
SLR

Rate

Bank Rate
Repo Rate
Reverse Repo Rate
Marginal Standing Facility Rate
Cash Reserve Ratio
Statutory Liquidity Ratio
Base Rate
Saving Bank Rates
Term Deposit Rates

Bank Rate
Also known as Discount rate
Definition
1. Bank rate is the rate at which RBI
extends advances (credit) to the
commercial banks (or)

7.00%
6.50%
6.00%
7.00%
4%
21.00%
9.30%-9.70%
4%
7%-8%

{ l gq]l

Dr S. Jagadeesh Yadav
Subject Expert,
Hyderabad

ls lZ..

f]l tyl: *i
GI l$ GV>jl $ {V>y st

$ -$, l-$ -]l D&l$

sakshieducation@gmail.com