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(4/4) 7 June 2018 DNA
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Sumant Kumar
B.Tech NIT Allahabad. Have written UPSC Mains 2 times with Physics. Channel "Sumant Kumar" on Youtube for Current Affairs Analysis.

U
Unacademy user
chairman of civil service board is cabinet secretary of India & he also senior most IAS officer..He works under the PMO & he set the agenda for ministerial meetings in PMO with some other most imp works
sir please continue this series. it was really helpful in understanding fundamental concepts alongwith analysis
Sk
Thank you sir for your easily understandable interacting vedios..keep going and teach us in this gorgeous way...
sir g try to reduce no of lessons per day ...complete it in maximum of 3 lessons....so that they can be revised
highest beaurocrat in india is cabinet secretary, he is also chairman of civil service board...
  1. India's rank marginally improves in peace index Global Peace Index (GPI), released by Australia-based Institute for Economics and Peace (IEP) The IEP, world's leading think tank that develops metrics to analyse peace and quantify its economic value, released the 12th edition of the GPI, or measure of global peacefulness, on Wednesday India's rank has marginally improved in "global peacefulness', at a time when there is an overall decline of global peace owing to escalation of violence in West Asia and and North Africa Pakistan's rank too has improved marginally India's GPI rank was 137 out of 163 countries in 2017, when the year 2016 was assessed. India's rank moved up to 136 for 2017. This is in line with the performance of some of the South Asian countries Nepal's rank moved up from 93 to 84, while Sri Lanka's position moved up too, from position 80 to 67. Pakistan's rank moved from 152 to 151 South Asia experienced the largest regional improvement in peacefulness." the report noted. However, the best performer of South Asia, Bhutan, slipped from 13th to 19th position, while Bangladesh' peace index deteriorated sharply. Bangladesh moved from 84th to 93rd position Peace continues to record a "gradual, sustained fall" across the world, the report noted Syria remained the least peaceful country in the world, a position that it had held for the past five years Iceland continues to remain the most peaceful country in the world, a position it has held since 2008.


  2. Monetary Policy Committee Olt is the committee which will decide India's Monetary Policy OThe formation of the monetary policy committee was mooted by the Urjit Patel committee. o The committee suggested that monetary policy be rule-based and not discretion-based. group of people OTargeting inflation is to be the core objective of the central bank, and it will be answerable to law-makers if it failed to achieve the target. Composition : 6 members. 3 members-nominated by Government o No government official will be nominated to the MPC. These 3 will be experts in economics, banking or finance. o The government nominees to the MPC will be selected by a Search-cum-Selection Committee under Cabinet Secretary with RBl Governor and Economic Affairs Secretary and three experts in the field of economics or banking or finance or monetary policy as its members. 13 members from RBI (RBI Governor(ex-officio chairperson), Deputy governor of RBl in charge of the monetary policy, an executive director of RBl.


  3. The RBI Governor will chair the committee. RBI Governor will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie ODecisions will be taken by majority vote with each member having a vote. If there's a tie between the 'Ayes' and the 'Nays, the RBI governor gets the deciding vote. O The number of times the RBI Governor uses the deciding vote will make arn impression that the committee is not in consensus. So the onus will be on next Governor to find a consensus. Thus, deciding vote is a good way of keeping a check. Members of the MPC will be appointed for a period of 4 years and shall not be eligible for reappointment. As per rules, no member of MPC should have any financial or other interest that prejudicially affects his functions as a member. It will be considered that the panel failed in achieving the inflation target if the lower or the upper range of the target is breached for three consecutive quarters.


  4. RBI implements monetary policy using certain tools. Two types of tools: Quantitative Tools Qualitative Tools: 1) Margin/LTV 1) Reserve Ratios{CRR, SLR), 2) (Open Market Operations) : 2) Consumer Credit Operations means both Selling and Purchasing. Control/Down Payment 3) Policy Rates 3) Rationing 1.Bank Rate, 2.LAF (Repo Rate, Reverse Repo Ratel,5) Direct Action. 3.MSF 4) Moral Suasion


  5. Bank Rate: When banks borrow long term funds from RBIl. They've to pay this much interest rate to RBI o Banks commercial/cooperative banks, development banks etc oCollateral: nothing. (Bank can borrow money without pledging government securities to RBI) o Such loans are given out either by direct lending or by rediscounting (buying back) the bills of commercial banks and treasury bills. Thus, bank rate is also known as discount rate.


  6. If client borrows money from RBI (for short term) then client has to pay this much interest rate to RBl Repo Rate Repo Rate or repurchase rate, is the rate at which RBI lends to banks for short periods. This is done by RBI buying government bonds from banks with an agreement to sell them back at a fixed rate. objective of Repo : to inject liquidity in the system S If RBI wants to make it more expensive for banks to borrow money, it increases the repo rate. S Similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.


  7. Reverse Repo Rate If client lends money to RBI (for short term) then RBI has to pay this much interest rate to client. Reverse repo Rate O the rate of interest at which the RBI borrows funds from other banks in the short term This is done by RBI selling government bonds/securities to banks with the commitment to buy them back at a future date. Means Collateral G-Secs and G-bonds. The banks use the reverse repo facility to deposit their short-term excess funds with the RBI and earn interest on it. ORBI can reduce liquidity in the banking system by increasing the rate at which it borrows from banks. Hiking the repo and reverse repo rate ends up reducing the liquidity and pushes up interest rates.


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