The framework of central banking policy in India has evolved around its objectives specified under the Reserve Bank of India Act, 1934, viz. “to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage; and to operate a modern monetary policy framework to meet the challenge of an increasingly complex economy, where the primary objective is to maintain price stability while keeping in mind the objective of growth.”
Consistent with the above, the Reserve Bank’s macroeconomic and monetary policy has focussed on maintaining price stability, ensuring adequate flow of credit to sustain the growth momentum, and securing financial stability. The Reserve Bank pursues its core function of issuance of bank notes and currency management as well as its agency functions such as management of public debt, banker to Government (Centre and States) and banker to the banking system, including regulation of bank reserves. As a full-service central bank, it also propels the development and consolidation of the country’s financial system and supports inclusive growth. The financial stability objective is enabled by the powers vested with it for regulation and supervision of the Indian financial system and its constituents, the money, debt and foreign exchange segments of the financial markets and the country’s payment and settlement system. These are augmented by the critical functions relating to maintenance of foreign exchange reserves and its role as the lender of last resort.
The Reserve Bank’s approach is to communicate its policy stance and its assessment of the evolving situation by providing rationale as well as supporting information and analysis to all stakeholders. In the interest of the public, the RBI also endeavours to provide insight into actions it undertakes as the regulator and supervisor of various entities and market segments. The RBI also conducts extensive public awareness campaigns for building awareness on issues that are relevant for customer education and protection using various media, and in 11 regional languages, along with Hindi and English.
In its Medium-term Strategy Framework for the period 2023-2025 – ‘Utkarsh 2.0’, the Reserve Bank has set out for itself the following Vision Statements:
The strategies to meet the objectives set by the vision statements are essentially well-thought-out actions to consolidate gains of the past, capitalise on emerging opportunities and meet future challenges. The strategic goals are aimed to be achieved through one or more tangible and time-bound milestones.