FEDERAL RESERVE V/S

RESERVE BANK OF INDIA

Basis Federal Reserve (USA) Reserve Bank of India
(RBI)
context Fed has a structure of a RBI is an autonomous
private, it is not wholly institution wholly
owned by the US owned by Indian
government that is government
many private entities
have a shareholding in
the US Fed.
Roles Issuer of currency, Issuer of currency,
banker’s bank, banker’s bank,
Monetary Policy, Monetary Policy,
Financial Supervision Financial Supervision
and Regulation, Lender and Regulation, Foreign
of Last Resort exchange management
Priorities US Fed is more The domestic priorities
concerned with the of RBI that guides the
unemployment rate and policy interest rate
the growth rate while (repo in India) are quite
deciding it's policy different and also it has
interest rate. to take care of Inflation
Trilemma The USA has full CAC RBI has limited it's
(Capital Account and it does not have a CAC and is more
Convertibility, unitary target of concerned with the
Monetary Policy, inflation control, it is other two on daily basis
currency Stability) enjoyed to overlook
both price stability and
employment
Monetary Tools Time to time by the Whereas RBI has a
FEDERAL RESERVE V/S
RESERVE BANK OF INDIA
central banks to control these tools exploitable
inflation or spur and QE or negative
economic growth- interest rates are a thing
CRR, SLR ratios, Repo, of far distant as of now.
Reverse Repo, MSF
rates etc. With near zero
interest rates, it has
come up with new ways
to spur growth like
quantitative easing,
helicopter money etc
Impact of policies US Fed policies and RBI's policies on the
even formal statements other hand effects
sends waves throughout emerging peers to some
the global markets. It's extent.
policies has more
international impact
than national. US
Treasury is considered
as a safe heaven for
investors
It is an interest rate that Overnight lending of
Fed charge over other money to the banks
banks for lending them from RBI. Under this
money from their facility banks can avail
reserve balances on an minimum one crore and
overnight basis maximum 2% of
NDTL. This is also
short-term facility.
FEDERAL RESERVE V/S
RESERVE BANK OF INDIA

FEDERAL RESERVE SYSTEM: The Federal Reserve System (FRS) is the Central
Bank of the United States and arguably the most powerful Financial institution
the world. It was founded to provide the country with a safe, flexible, and stable
monetary and financial system. The FRS is comprised of 12 regional Federal
Reserve Banks that are each responsible for a specific geographic area of the
U.S. The system is often known simply as “the Fed.

RESERVE BANK OF INDIA: The Reserve Bank of India (RBI) is India's central
banking and monetary authority. RBI regulates loans offered by banks and non-
banking financial institutions to government entities, businesses, and consumers
and controls the availability of funds in the financial system for credit.

SHAIK AADIL AHMED

SEC-D (191436)

Batch 2019-21