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ECONOMY

Money and Banking

Reserve Bank of India Third Quarter Review of Monetary Policy for 2012-13:


The Reserve Bank of India released the 3rd Quarter Review of Monetary Policy for 2012-13 on January 29, 2013. The important Policy Measures taken by RBI are as follows:

  • Repo Rate: Reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 7.75 per cent with immediate effect.
  • Reverse Repo Rate: Reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, also stands adjusted to 6.75 per cent with immediate effect.
  • Marginal Standing Facility (MSF) Rate: The Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, stands adjusted to 8.75 per cent with immediate effect.
  • Cash Reserve Ratio: Reduced the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.25 per cent to 4.0 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning February 9, 2013.
  • Bank Rate: The Bank Rate stands adjusted to 8.75 per cent with immediate effect.
  • The RBI revised the baseline projection of GDP growth for 2012-13 from 5.8 per cent given in the 2nd Quarter Review to 5.5 per cent.



Broad money (M3)

Broad money is basically described as the sum of currency outside banks; demand deposits other than those of the central government; the time, savings, and foreign currency deposits of resident sectors other than the central government; bank and traveler’s checks; and other securities such as certificates of deposit and commercial paper.

Broad money (M3) for 2012-13 (up to January 25, 2013) increased by 10.1 per cent as compared to 10.5 per cent during the corresponding period of the last year. The year-onyear growth, as on January 25, 2013 was 12.7 per cent as compared to 14.8 per cent in the previous year.


Reserve money (M0)

Reserve Money consists of currency in circulation,bankers' deposits with the RBI and other deposits with the RBI.

Reserve money (M0) during the financial year 2012-13 (up to January 25, 2013) showed an increase of 4.4 per cent as compared to 3.8 per cent in the corresponding period of the previous year. The year-on-year variation revealed an increase of 4.2 per cent (up to January 25, 2013) compared to 14.6 per cent on the corresponding date of the previous year.

Net Foreign Exchange Assets (NFA)

An important source of reserve money, namely, net foreign exchange assets (NFA) of the RBI increased by 6.1 per cent (as on January 25, 2013) as compared to increase of 8.0 per cent in the same period last year. The y-o-y growth rate of NFA, showed an increase of 8.9 per cent as compared to an increase of 7.6 per cent on the corresponding date of the last year.


Scheduled Commercial Banks (SCBs): business in India

During the current financial year 2012-13 (up to January 25, 2013), Bank credit showed increase of 9.5 per cent, as compared to increase of 10.4 per cent as during the corresponding period last year. The y-o-y growth variation revealed an increase of 16.1 per cent as compared to 16.5 per cent during the same period in the previous year.


Non-Food credit during this period increased by 9.2 per cent (up to January 25, 2013) as compared to increase of 10.1 per cent during the corresponding period last year. The y-o-y growth variation revealed an increase of 15.9 per cent as compared to 16.2 per cent during the same period in the previous year.


The aggregate deposits with Scheduled Commercial Banks (SCBs) recorded an increase of 10.6 per cent (up to January 25, 2013) as compared to increase of 10.8 per cent during the corresponding period of last year. The y-o-y growth variation revealed an increase of 13.2 per cent as compared to 15.7 per cent in the previous year.

Interest rates (per cent per annum)

As on January 25, 2013, Bank Rate was 9.00 per cent as compared to 6.00 percent on the approximately corresponding date of last year. Call money rates (borrowing & lending) were 8.00 per cent as compared with 8.97 per cent on the approximately corresponding date of last year.

 

 

 

 
 
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