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Role of Central Bank - Understanding Monetary Policy (for UPSC CSE)
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This lesson goes beyond the introduction and covers the extremely important role of RBI in determining monetary policy - how it acts as a banker to the banks, banker to the government, lender of the last resort, as a controller of the credit, how it announces monetary policy 6 times a year and ends with the discussion on Qualitative and Quantitative instruments of Monetary Policy.

Ayussh Sanghi is teaching live on Unacademy Plus

Ayussh Sanghi
Passionate Educator - CSE / Other Govt Exams [Peep into my Unacademy Plus Courses & experience awesome learning.]

Unacademy user
can you make videos in English
Sir Can you Please tell me what do you mean by Lender of the Last Resort.
sir plz tell me weather rate of interest decided by rbi or banks itself
sir u missed out discussing types of monetary policy

  2. ABOUT ME >Passionate about Teaching >Taught at most reputed Civil Services Institutes >CA, Lawyer >Hit "Contribute to Ayussh" Follow me on: AyusshSanghi

  3. FUNCTIONS OF CENTRAL BANIK k Custody and Management of Foreign Exchange Reserves. k Acting as a Bank to the Banker Acting as a Banker to the Government Central Bank as the Lender of the Last Resort Central Bank as the Controller of Credit

  4. Central Bank as the Controller of Credit The central bank of a country exercises discretionary control over the monetary system of the country. * The central bank of a country exercises discretionary It commands an important position in the monetary and banking structure of the country

  5. Central Bank as the Controller of Credit From all functions mentioned in the previous slide, control of credit is the most important. ak essential for economic stability and orderly growth of an economy.

  6. Central Bank as the Controller of Credit * The Reserve Bank of India announces the Monetary Policy six times a year. This policy determines the supply of money in the economy and the rate of interest charged by banks The policy also contains an economic overview and presents future forecasts.

  7. Central Bank as the Controller of Credit * The instruments of monetary policy are: Quantitative Qualitative

  8. Qualitative Instruments Margin requirements, Consumer credit regulation and guidelines, Moral Suasion and Direct Action

  9. Quantitative Instruments Bank rate, Statutory Liquidity Ra Cash Reserv Repo Rate k Statutory Liquidity Ratio, * Reverse Repo Rate * Open Market Operations