what is reserve bank of india and monetary policy.

  What is the reserve bank of India (RBI)

The Reserve Bank of India (RBI) is the central bank OF India established on 1 Apr 1935, under the Reserve bank of India ACT., the regulatory body under the ministry of finance Government of India. RBI is responsible for issue the supply of the Indian rupee and regulator of the Indian banking system. RBI is used monetary policy to created financial stability in India. Reserve bank of India is known as a banker’s bank.

The rates of RBI monetary policy are REPO Rate, REVERSE REPO Rate, MSF Rate, CRR Rate, and SLR Rate.

· REPO RATE 

REPO rate is a rate at which RBI lends to banks. With these loan commercials, banks give loans to customers. The reduction in the REPO rate means that many types of loans from the bank will become cheaper.  REPO rate is changed in the RBI decision.

CURRENT REPO RATE – 4.00% in July 2021.

· REVERSE REPO RATE

The Reverse Repo Rate is the opposite of the REPO rate. IT is the rate at which banks get interested in their money deposited in RBI.  The reverse repo rate is controlling the liquidity of cash in the markets.

CURRENT REVERSE REPO RATE IS --- 3.35%  IN July 2021.

·MSF RATE  (MARGINAL STANDING FACILITY)

IN this MSF rate, commercial banks can tank loans from RBI in one night and emergency when inter-bank liquidity dries. This repo rate is applied to shor-term financial needs. At the same time, the MSF rate is meant for lending overnight to banks.

CURRENT MSF RATE – 4.25%  IN JULY 2021.

· CRR RATE (CASH RESERVE RATIO)

The bank has to keep a certain part of their total cash with the reserve bank of India; the is called the cash Reserve Ratio. This is mandatory for all banks to CRR to be deposit into RBI.

CURRENT CRR RATE – 4.00%  IN JULY 2021.

· SLR  RATE (STATUTORY LIQUIDITY RATIO)

It is that part of the deposits available with the banks, which they must keep with them before issuing loans. When banks keep the SLR safe, only then do they have the right to give loans on top of their deposits.

CURRENT SLR RATE- 18.00% IN JULY 2021.

SOME GK FOR RBI (RESERVE BANK OF INDIA)

1. Reserve bank of India was established in 1935.
2. Reserve bank of India was set up on the Hilton young commission.
3. The Reserve bank of India was nationalized in 1949.
4. D Deshmukh was the first Indian-origin governor of the Reserve bank of India.
5. Kolkata is the first headquarter of RBI.
6. RBI headquarters established in 1937 in Mumbai.
7. Sir Osborne Smith is the first governor in the Reserve bank of India.
8. Reserve bank of India is known as a banker’s bank.

1. Shaktikanta das is a present governor of RBI.
2. The accounting year of the Reserve bank of India is between July 1 and June 30, while the country's financial year is between April 1 and March 30.
3. Reserve bank of India has 22 regional offices, most of which are located in the states in their state capital.

The functioning of the RBI was sung by the central board of directors.

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