1. INDIAN FINANCIAL SYSTEM CIA-III
RBI AND IT’S CREDIT CONTROL MEASURES

2. POINTS COVERED CENTRAL BANK-MEANING AND DEFINITION
ORIGIN, HISTORY AND STRUCTURE
QUANTITATIVE AND QUALITATIVE MEASURES
CONCLUSION

3. CENTRAL BANK “A central bank is a lender of last resort”
-- Prof.Hawtry
“It is a bank of banker”
-- Samuelson
“Bank which has monopoly over note issue”
-- Vera Smith
“Central bank is the government’s bank”
-- Sayers

4. RBI AND IT’S ORIGIN
Commenced Operations on 1st April 1935 as per The Reserve Bank of India Act, 1934 (II of 1934) and Nationalise on 1st Jan 1949.
To regulate the issue of banknotes
To maintain reserves with a view to securing monetary stability and
To operate the credit and currency system of the country to its advantage.

5. STRUCTURE OF RBI RESERVE BANK OF INDIA
COMMERCIAL BANK CO OPERATIVE BANK
-PUBLIC SECTOR BANK STATE CO-OP BANK
-PRIVATE SECTOR BANK CENTRAL CO-OP BANK
-REGIONAL RURAL BANK PRIMARY CO-OP SOC

6. OBJECTIVES OF CREDIT CONTROL
To stabilise internal price level
To stabilise the rate of foreign exchange
To protect the outflow of gold
To control business cycles
To meet business needs
To have growth & stability

7. 1. GENERAL OR QUANTITATIVE CREDIT CONTROL
BANK RATE:-
-SECTION 49 OF THE RESERVE BANK OF INDIA ACT
-”THE STANDARD RATE AT WHICH THE BANK IS PREPARED TO BUY OR DISCOUNT BILLS OF EXCHANGE OR OTHER COMMERCIAL PAPERS ELIGIBLE FOR PURCHASE UNDER THIS ACT.”
-PACE SETTER TO OTHER MARKETS
-CURRENT BANK RATE-6%

8. VARIABLE RESERVE RATIO:-
-SECTION 42(1)
-DISPARITY BETWEEN DEMAND LIABILITIES AND TIME LIABILITIES
-WHAT IS CRR?
-CURRENT CRR-5%

9. STATUTORY LIQUIDITY REQUIREMENTS:-
-TO OFFSET THE IMPACT OF VARIABLE RESERVE RATIO
-SECTION 24
-LIQUID ASSETS-CASH, GOLD AND UNENCUMBERED SECURITIES.

10. SYSTEM OF DIFFERENTIAL RATES:-
-SLAB BASIS
-BASIC QUOTA TO A SPECIFIC PERCENTAGE OF STATUTORY REQUIREMENTS

11. NET LIQUIDITY RATIO (N.L.R.):-
-FORMULA
-EVERY PERCENTAGE DROP IN THE RATIO, THE COST OF BORROWING FROM RBI ON THE ENTIRE AMOUNT WAS TO GO UP BY ½%
-CURRENT N.L.R.

12. OPEN MARKET OPERATIONS:-
-PURCHASE AND SALE, BY CENTRAL BANK, OF A VARIETY OF ASSETS SUCH AS GOLD, GOVERNMENT SECURITIES, FOREIGN EXCHANGE AND EVEN COMPANY SHARES.
-INSTRUMENTS OF MONETARY POLICY AND ALSO OF PUBLIC DEBT.

13. MINIMUM MARGIN FOR LENDING AGAINST SPECIFIC SECURITIES:-
2. SELECTIVE OR QUALITATIVE CREDIT CONTROL
MINIMUM MARGIN FOR LENDING AGAINST SPECIFIC SECURITIES:-
-SINCE 1955
-RESTRICT ADVANCES AGAINST SPECIFIC SECURITIES
-PADDY, RICE, PULSES, COTTON, TEXTILES.

14. CEILING ON THE AMOUNT OF CREDIT FOR CERTAIN PURPOSE:-
-CREDIT AUTHORIZATION SCHEME(CAS)

15. DISCRIMINATORY RATES OF INTEREST ON CERTAIN TYPES OF ADVANCES
MORAL SUASION:-
-PERSUASION
-NO LEGAL COMPULSION

16. DIRECT ACTION:-
-PERIODIC LETTERS
-DISCUSSIONS
PUBLICITY:-
-CONFERENCE CONVENED BY THE GOVERNOR OF INDIA.

17. DIFFERENCE BETWEEN QUALITATIVE & QUANTITATIVE.
Total Volume or Quantity of Money
It controls credit indirectly
Lenders are controlled not the borrowers
It is known as general credit control
Instruments used are bank rate, open market operations., CRR etc
Qualitative
Quality or use or purpose of credit
It controls credit directly
Lenders and borrowers both are influenced
It is known as selective credit control
Instruments are variations in market requlations,
Consumer credit regulation, direct action etc

18. CONCLUSION
CENTRAL BANK PLAYS IMPORTANT ROLE IN ACHIEVING ECONOMIC GROWTH OF A DEVELOPING COUNTRY.
IT PROMOTES ECONOMIC GROWTH WITH STABILITY.
IT HELPS IN ATTAINING FULL EMPLOYMENT OF RESOURCES, IN OVERCOMING BALANCE OF PAYMENT DISEQUILIBRIUM & IN STABILIZING EXCHANGE RATES.

19. THANK YOU KARAN JAIN-08D1251 PARAG JHAVER-08D1252 PAVAN S.-08D1253
PRANSHU JAIN-08D1254
PRATIK JAIN-08D1255
RACHIT VAKHARIA-08D1256
SANDEEP JAIN-08D1257
SAURAV MEHTA-08D1258
SHEYRAT MAKHIJA-08D1259
SRIVATSA CHAMARIA-08D1260