Overview

Functions

Mandate and Objectives

According to the Reserve Bank of India Act, 1934, “...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; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth".

Main Functions

• Acts as a secretariat for the Monetary Policy Committee (MPC).

• Assists the MPC in formulating the monetary policy.

• Provides technical inputs to the MPC such as short-term and medium term growth and inflation projections.

• Plays a key role in implementing monetary policy by assessing and forecasting liquidity conditions.

• Participates in Financial Markets Committee (FMC) which meets daily to guide financial markets operations including liquidity management.

• Monitors and assesses transmission of monetary policy on a regular basis.

• Prepares Monetary Policy Report (MPR).

• Compiles sector-wise and industry-wise bank credit data.

• Monitors compliance with CRR/SLR maintained banks.

• Acts as a nodal department for the Bank to act as a lender of the last resort.

• Authorises and allocates food credit to state governments.

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