RAGHURAM RAJANS EFFORT

ON INDIAN ECONOMY
Submitted to
Prof. Raj
Chakraborty

Shaik Sharukh
Dileep Pydisetty
Bhupal Goud
Gideon Gurrala
Sandeep Pusarapu

Sowjanya
Sudeep Gumma
Nihar Manchana
Siva Sagar

AGENDA FOR RAGHURAM G. RAJAN

He is appointed as the 23rd governor of RBI on

September 4th 2013. He became the youngest ever
chief economist at IMF at the age of 40 and served
during 2003-2007

As soon as he became the governor of RBI, he took

many steps to stop the fall of INR value

Apart from streaming the rupee fall, banking sector

reforms was also high on Rajans list of priorities

He stated that Changing the financial sector will

help India grow

RBI:THE SAVIOUR OF INDIAN ECONOMY

There was a lot of expectation that Rajan would tackle

the most serious economic problems

In this regard he devised five pillar of financial reform

which were :

Clarifying and strengthening the monetary policy framework

Reforming the banking system

Liberalising Indian markets

Increasing financial inclusion

Sorting out financially distressed financial institutions

RAGHURAM RAJANS MAIN INITIATIVES (FIRST 60 DAYS)

Completely freed branch licensing

Talked about permitting banks to acquire local lenders

with riders

Attracted 12 Billion USD via swap facility of dollar

deposits

Clean-up of bad loans in the banking sector

particularly public sectors banks

Raised the main lending rate twice to control Inflation

in the economy

STRENGTHENING THE MONETARY POLICY

FRAMEWORK

Consumer Price Index has reduced from 11% to 5% a

year ago

Raghuram Rajan began raising interest rates after five

months into the job even as Indias economic growth
was slowing.

CRR,SLR,Repo Rate were changed by RBI and they

stood at 4%,21%,6.5% respectively.

The decline in Indias high inflation rate comes after

Rajan took office as the countrys central banker

REFORMING THE BANKING SYSTEM

Issuing licenses to payment banks and small banks

Encouraging micro finance institutions

Increased Interest rates on fixed deposits to attract

the customers

Took measures to reduce CPI rather than controlling

WPI

Completely liberalised Internet banking by launching

Unified Payments Interface (UPI)

LIBERALISING INDIAN MARKETS

Took measures to maintain liquidity in money markets

by selling and buying securities in the market place

Started masala bonds for the NRIs to attract foreign

deposits in India

Improve cash management flow and explore the

option of raising funds through innovative debt
instruments like sovereign gold bonds

Foreign portfolio Investors will get direct access to

market without going through brokers

INCREASING FINANCIAL INCLUSION

Financial Inclusion is the delivery of banking services

at affordable costs to people of low income groups

Financial products and services like bank accounts,

Immediate credit,Insurance,mortagage &
Entrepreneurial credit

Under privileged section in rural and urban areas like

farmers,small vendors, Industrial labours & women

Prime Minister Jan Dhan Yojana was launched on

28Aug14 with a target to provide universal access to
banking facilities

It includes Zero balance accounts to promote savings

of poor households

CHANGES A LITTLE TO A LOT

The RBI Governor has also tasted only limited successin

prodding banks to move away from their lazy banking habits.

The two cuts in statutory liquidity ratio aggregating to 1

percentage point have to be seen in this context

Dr. Rajan was clear in his view that banks should be more active
in lending rather than simply parking their funds in government
securities.

Household financial savings as a percentage of GDP has shown

volatility over the years. It fell from 12% to 7% in 2011-12 and
raised to 7.5% in 2014-15

SOURCES OF INCOME TO RBI OVER THE YEARS

THANK YOU
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