Monetary policy refers to the policy of the central bank of a country to regulate and control the volume, cost and allocation of money and credit with the aim of achieving the objectives of optimum levels of output and employment, price stability, balance of payment equilibrium, or any other goal set by the government. Monetary and fiscal policies are closely [...]
The following points highlight the seven main functions of the RBI. The functions are: 1. Monopoly of Note Issue 2. Banker's Bank 3. Banker to the Government 4. Controller of Credit 5. Exchange Management and Control 6. Miscellaneous Functions 7. Promotional and Developmental Functions. Function # 1. Monopoly of Note Issue: Like any other central bank, the RBI acts as [...]
The following points highlight the nine main causes for the failure of Reserve Bank of India. Some of the causes are: 1. Absence of co-ordination in the money-market 2. Absence of proper banking facilities 3. There is no uniformity in interest rates 4. Absence of well developed bill market and Others. Cause # 1. Absence of co-ordination in the money-market: [...]