Reverse Ratio : Banks keep aside a certain percentage of cash reserves or RBI approved assets. There are two types of reserve ratio:
Cash Reserve Ratio (CRR) : Banks set aside this portion in cash with the RBI. The bank cannot lend this amount to anyone or earn a profit or interest rate on CRR.
Statutory Liquidity Ratio (SLR) : This portion is set aside by the banks in the form of liquid assets such as gold or RBI approved securities such as government securities. Banks earn interest on these securities, but it’s very low.
Open Market Operations : The RBI buys and sells government securities in the open market, also referred to as Open Market Operations to control the supply of money.
When the RBI sells government securities, the liquidity is sucked from the market, and buying securities provides liquidity, which helps to control inflation. The main aim of the open market operation is to keep a check on temporary liquidity mismatches in the market, which happens due to the inflow of foreign capital.
Qualitative tools :These tools affect the money supply of a specific sector of the economy.
Margin requirements : The RBI mentions a certain margin against collateral. When the RBI raises the margin requirements, customers will be able to borrow less and vice-versa.
Selective credit control : Through this method, RBI avoids lending to speculative businesses or selective industries.
Moral suasion : With the help of this tool, the central bank persuades other banks to keep money in government securities and not in any other sectors.
Cash Reserve Ratio (CRR) : Banks set aside this portion in cash with the RBI. The bank cannot lend this amount to anyone or earn a profit or interest rate on CRR.
Statutory Liquidity Ratio (SLR) : This portion is set aside by the banks in the form of liquid assets such as gold or RBI approved securities such as government securities. Banks earn interest on these securities, but it’s very low.
Open Market Operations : The RBI buys and sells government securities in the open market, also referred to as Open Market Operations to control the supply of money.
When the RBI sells government securities, the liquidity is sucked from the market, and buying securities provides liquidity, which helps to control inflation. The main aim of the open market operation is to keep a check on temporary liquidity mismatches in the market, which happens due to the inflow of foreign capital.
Qualitative tools :These tools affect the money supply of a specific sector of the economy.
Margin requirements : The RBI mentions a certain margin against collateral. When the RBI raises the margin requirements, customers will be able to borrow less and vice-versa.
Selective credit control : Through this method, RBI avoids lending to speculative businesses or selective industries.
Moral suasion : With the help of this tool, the central bank persuades other banks to keep money in government securities and not in any other sectors.
♦️Reserve Bank of India Act, 1934♦️
➖➖➖➖➖➖➖➖➖➖➖➖
Reserve Bank of India was first enacted by parliament on 6 March 1934. In the beginning of 18 Th century, the joint – stock banking has been associated with the agency houses for the purpose of doing banking business. Indigenous bankers, nidhis, money lenders were acted as bankers. However, the growth of joint – stock banking with the help of agency houses leads to regulating the rules and regulation which was governing them as an act. So the need for the central banking system in India arose in 1773. However, it was the Hilton Young committee in 1926 recommended the establishment of a central bank in India. Therefore, it took 7 years to pass the RBI act 1934 as a shareholders banks. Finally, a number of banking companies were registered under the companies’ act 1956 and The RBI act 1934 for the purpose of protecting interests of the depositors’, ensuring control over the credit, develop banking on good lines and avoiding bank failures.
There are total 61 Sections in the RBI Act 1934.
👉🏻Important Sections in the RBI Act 1934
Section 3: Establishment and incorporation of Reserve Bank.
Section 4: Capital of the Bank. The capital of the Bank shall be five crores of rupees.
Section 6: Establishment of Offices, branches and agencies
Section 8: The composition of central board of Reserve Bank of India
Section 17: The business that RBI can carry out
Section 20: Obligation of the Bank to transact Government business.
Section 21: Bank to have the right to transact Government business in India.
Section 21A: Bank to transact Government business of States on agreement.
Section 22: Right to issue bank notes.
Section 24: Denominations of notes. (1) Subject to the provisions of sub-section (2), bank notes shall be of the denominational values of two rupees, five rupees, ten rupees, twenty rupees, fifty rupees, one hundred rupees, five hundred rupees, one thousand rupees, five thousand rupees and ten thousand rupees or of such other denominational values, not exceeding ten thousand rupees.
Section 27: Re-issue of notes. The Bank shall not re-issue bank notes which are torn, defaced or excessively soiled.
Section 26 (1): Defines legal tender of notes
Section 26(2): Withdrawal of legal tender of notes
Section 42: Cash reserves of scheduled banks to be kept with the Bank.
Section 45(U): Defines repo, reverse repo, derivative, money market instruments and securities.
The first schedule of the RBI Act 1934 defines the 4 areas under which the Indian states should come. The 4 areas are Western Area, Eastern Area, Northern Area, Southern Area
➖➖➖➖➖➖➖➖➖➖➖➖
Reserve Bank of India was first enacted by parliament on 6 March 1934. In the beginning of 18 Th century, the joint – stock banking has been associated with the agency houses for the purpose of doing banking business. Indigenous bankers, nidhis, money lenders were acted as bankers. However, the growth of joint – stock banking with the help of agency houses leads to regulating the rules and regulation which was governing them as an act. So the need for the central banking system in India arose in 1773. However, it was the Hilton Young committee in 1926 recommended the establishment of a central bank in India. Therefore, it took 7 years to pass the RBI act 1934 as a shareholders banks. Finally, a number of banking companies were registered under the companies’ act 1956 and The RBI act 1934 for the purpose of protecting interests of the depositors’, ensuring control over the credit, develop banking on good lines and avoiding bank failures.
There are total 61 Sections in the RBI Act 1934.
👉🏻Important Sections in the RBI Act 1934
Section 3: Establishment and incorporation of Reserve Bank.
Section 4: Capital of the Bank. The capital of the Bank shall be five crores of rupees.
Section 6: Establishment of Offices, branches and agencies
Section 8: The composition of central board of Reserve Bank of India
Section 17: The business that RBI can carry out
Section 20: Obligation of the Bank to transact Government business.
Section 21: Bank to have the right to transact Government business in India.
Section 21A: Bank to transact Government business of States on agreement.
Section 22: Right to issue bank notes.
Section 24: Denominations of notes. (1) Subject to the provisions of sub-section (2), bank notes shall be of the denominational values of two rupees, five rupees, ten rupees, twenty rupees, fifty rupees, one hundred rupees, five hundred rupees, one thousand rupees, five thousand rupees and ten thousand rupees or of such other denominational values, not exceeding ten thousand rupees.
Section 27: Re-issue of notes. The Bank shall not re-issue bank notes which are torn, defaced or excessively soiled.
Section 26 (1): Defines legal tender of notes
Section 26(2): Withdrawal of legal tender of notes
Section 42: Cash reserves of scheduled banks to be kept with the Bank.
Section 45(U): Defines repo, reverse repo, derivative, money market instruments and securities.
The first schedule of the RBI Act 1934 defines the 4 areas under which the Indian states should come. The 4 areas are Western Area, Eastern Area, Northern Area, Southern Area
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NTA-UGC-JRF/NET Commerce pinned «Greetings Aspirants 📌Notification Out📌 TELANGANA STATE ELIGIBILITY TEST TS - SET-2022 Telangana State Eligibility Test www.telanganaset.org •*¨*•.¸¸☆*･ﾟ❤️ﾟ･*☆¸¸.•*¨*• @JRF_NETCommerce @JRF_NET_Commerce •*¨*•.¸¸☆*･ﾟ❤️ﾟ･*☆¸¸.•*¨*•»
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Hello Aspirants,
I trust the festival season has concluded for all of you! Are you eagerly anticipating the arrival of the new year with positive news? Continue your practice as planned.
We are gearing up for a full-fledged test scheduled for Nov 26th. Those keen to participate can make the payment and enroll in the test.
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I trust the festival season has concluded for all of you! Are you eagerly anticipating the arrival of the new year with positive news? Continue your practice as planned.
We are gearing up for a full-fledged test scheduled for Nov 26th. Those keen to participate can make the payment and enroll in the test.
* Test Date: Nov 26th *
NOTE: If you are already enrolled in the 6-month or yearly course, information will be shared in our group ID. Disregard this message.
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NTA-UGC-JRF/NET Commerce pinned «Hello Aspirants, I trust the festival season has concluded for all of you! Are you eagerly anticipating the arrival of the new year with positive news? Continue your practice as planned. We are gearing up for a full-fledged test scheduled for Nov 26th. Those…»
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I hope this message finds you well. Enrollment for the test is now closed. Payment confirmation details have been sent to your respective email IDs. The test link will be shared by end of day. Sunday-allowing you to attend the test.
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I hope this message finds you well. Enrollment for the test is now closed. Payment confirmation details have been sent to your respective email IDs. The test link will be shared by end of day. Sunday-allowing you to attend the test.
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Greetings Aspirants,
I hope this message finds you well. Kudos to all the KSET qualifiers! Your hard work and dedication have paid off, and there's so much more to achieve. Keep striving and happy learning!🥳
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