Shri Jasbir Singh while outlining the functions of RBI said that it enunciates the Monetary Policy other than management of foreign exchange reserves. He said that RBI has financial institution developmental role also.
Shri Jasbir Singh said that the rapid pace of growth achieved by the financial system in the deregulated regime necessitated a deepening and widening of access to banking services. The new millennium has seen the Reserve Bank play an active role in balancing the relationship between banks and customers; focusing on financial inclusion. But still there are about 145 million people mostly living in the rural areas who do not have any access to banking system. Now efforts are to cover 2000 villages under banking facilities by 2012.
While talking on inflation, he said the black money finding it way through the system results in an increase in the price of goods. However, present increase in the prices of basic food items such as onion, pulses are the issues of governance for matching the supply with the demand.Shri Jasbir Singh said that in order to control the rising inflation, RBI in its quarterly monetary policy declared on January 25 raised Repo rate , the one at which RBI lends to banks will now be 6.50%, reverse repo, the rate banks receive for depositing funds RBI will be at 5.50%. Cash reserve ratio, the amount of deposits that banks have to keep aside with the central bank, was left unchanged at 6%. He said that The Reserve Bank projected GDP growth at 8.5%.
Dr. P.K.Vasudeva, past president CMA concluded the session and thanked Sh Jasbir Singh for sharing his views and enlightening the audience regarding various aspects of RBI
To Sh P K vasudeva. a question for You
ReplyDeleteWhich gives more income;
Option A -
funds Rs 100
interest rate 9.5% pa
inflation rate at
double the saving
rate of Interest @ 19% pa
Funds at the end of year = 109.5
less inflation 19
net funds = 90.5
Option B
funds Rs 100
interest rate 4.00% pa
inflation rate at
double the saving
rate of Interest @ 8% pa
Funds at the end of year = 104.0
less inflation 8
net funds = 96.0
income at end
Dear Kapil....both are bad. Investor ending up losing money is a faulty monetary and fiscal policy....
ReplyDeleteWrong. a lower savings rates leads to lower inflation thus consumers have higher disposable income. thus rate of interest @ 4% gives higher disposable income at the end of the year as already detailed above.
ReplyDeletenext question
Mr x who lives in India has a company registered in cayman Islands (or abroad) A country in south Africa wants to but arms worth 100 billion from Russia. The company of Mr x brokers the deal between African country and arms manufacturers through his company registered abroad at commission of 20% and deposits 20 billion in his bank account in Liechtenstein. How does India has any claims over the funds of Mr X.