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Jagranjosh Exam Prep: Government, MBA, Engineering, CBSE Notes are very useful for non technical exams.India received highest remittances of USD 69 billion in 2017: World BankApr 24, 2018The top remittance recipients were India with USD 69 billion, followed by China at second (USD 64 billion), the Philippines at 3rd (USD 33 billion), Mexico at 4th (USD 31 billion), Nigeria at 5th (USD 22 billion) and Egypt at 6th (USD 20 billion).President promulgates Fugitive Economic Offenders OrdinanceApr 23, 2018President Ram Nath Kovind has promulgated the Fugitive Economic Offenders Ordinance, which will allow the government to confiscate properties and assets of loan defaulters who flee the nation. The Fugitive Economic Offenders Bill was introduced in the Lok Sabha on March 12, but it could not be taken up for discussion due to disruptions in the house over various issues.55 percent of all new bank accounts in the world opened from India: Global Findex Report 2017Apr 23, 2018Despite having a relatively high account ownership, India claims a large share of the global unbanked population, after China. Over 190 million Indian adults still do not have a bank account.India to set up natural gas trading hubApr 16, 2018The Union Government plans to set up a natural gas trading hub to boost consumption of natural gas in India. The hub would be used for the trade and supply of natural gas through a market-based mechanism instead of multiple formula driven prices.Indian economy has recovered from impact of demonetisation, GST: World Bank ReportApr 16, 2018India’s growth decelerated during the most of 2016. The withdrawal of currency from circulation (demonetisation) in November 2016 and the introduction of the Goods and Services Tax regime added to the slowdown in the economy.RBI directs banks to stop services to businesses dealing in virtual currenciesApr 6, 2018The Reserve Bank of India has directed all the entities regulated by it including banks to stop providing services to businesses dealing in virtual currencies such as bitcoin, in order to protect consumer interest and check money laundering.Panel set up to examine tax evasion risks posed by super richApr 6, 2018The Central Board of Direct Taxes has set up an internal working group to examine the taxation aspects of high net worth individuals (HNWIs). There has been a trend of HNWIs migrating from their country of residence to other jurisdictions, which poses a substantial tax risk, as they may treat themselves as non-residents for taxation purposes.RBI releases First Bi-monthly Monetary Policy Statement 2018-19Apr 5, 2018The retail inflation based on the Consumer Price Index (CPI) fell to 4.44 percent in February 2018 from 5.07 percent in January 2018.Government launches Digital Initiative for Ease of ExportApr 4, 2018Digital initiatives will boost India’s potential for agricultural and food export.Total subscribers under under Atal Pension Yojana crosses 97 lakhApr 3, 2018The subscriber base of Atal Pension Yojana (APY) stood at 97.05 lakh at the end of the 2017-18 fiscal, a tad lower than the target of 1 crore set by the pension regulator PFRDA.E-way Bill System rolled out in IndiaApr 2, 2018The Central helpdesk of GST has made special arrangements with 100 agents to answer queries of taxpayers and transporters related to e-way Bills.Top Cabinet Approvals: 29 March 2018Mar 29, 2018The Union Cabinet approved signing of the Memorandum of Understanding (MoU) between India, United Kingdom and Northern Ireland regarding cooperation and Exchange of Information for the purposes of combating international criminality and tackling serious organised crime.NITI Aayog releases baseline ranking of Aspirational DistrictsMar 29, 2018The NITI Aayog has launched the baseline ranking for 101 aspirational districts based on 49 indicators across several sectors including health and nutrition, education, agriculture and water resources, financial inclusion, skill development and basic infrastructure.SEBI accepts most of recommendations of Uday Kotak Committee on Corporate GovernanceMar 29, 2018One of the major recommendations of the committee was to separate the post of CEO or MD and Chairperson of the listed companies.EPFO launches portal for pensionersMar 28, 2018The Employees' Provident Fund Organisation has launched a new portal for pensioners, through which EPFO pensioners would be able to the details of pension-related information. The portal will assist users with details such as pension payment order number, payment order details, passbook information and other related information.India, Hong Kong sign double taxation avoidance agreementMar 21, 2018India and Hong Kong have signed a double taxation avoidance agreement (DTAA) to improve transparency in tax matters and help curb tax evasion and avoidance. The treaty will improve transparency in tax matters and prevent double taxation.India, ADB sign $120 million loan to improve rail infrastructureMar 17, 2018The Union Government has signed a $120 million loan agreement with the Asian Development Bank for completion of works for double-tracking and electrification of railway tracks along high-density corridors to improve operational efficiency of Indian railways.US challenges India's export subsidy programmes at WTOMar 15, 2018As per US trade representative, export subsidy programmes harm American workers by creating an uneven playing field on which they must compete.Insolvency and Bankruptcy Board of India signs MoU with Reserve Bank of IndiaMar 13, 2018The MoU provides for sharing of information between the RBI and the IBBI, subject to the limitations imposed by the applicable laws.NITI Aayog launches Women Entrepreneurship PlatformMar 8, 2018NITI Aayog launched the Women Entrepreneurship Platform (WEP) on March 8, on the occasion of International Women’s day. The initiative is aimed at building a vibrant ecosystem for women across India to help realise their entrepreneurial aspirations, scale-up innovative initiatives and chalk-out sustainable, long-term strategies for their businesses.Iraq becomes India’s biggest oil supplierMar 6, 2018Iraq has overtaken Saudi Arabia to become India's top crude oil supplier, meeting more than a fifth of the country's oil needs in the current financial year.Union Cabinet approves setting up of National Financial Reporting AuthorityMar 5, 2018The NFRA will be established as an independent regulator for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms and therefore, enhance investor and public confidence in financial disclosures of companies.Union Cabinet approves Fugitive Economic Offenders Bill, 2018Mar 5, 2018Union Cabinet has given its assent to the introduction of the Fugitive Economic Offenders bill that aims to punish those who fled India after committing major economic offences such as Nirav Modi and Vijay Mallya.RBI launches Ombudsman Scheme for NBFCsFeb 26, 2018The scheme will provide a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs.NITI Aayog to soon launch special cell for women entrepreneursFeb 23, 2018The cell, to be called Women Entrepreneurial and Innovation Cell of Niti Aayog, will be headed by Niti Aayog advisor Anna Roy and will offer women financial support through the MUDRA micro-loan scheme.India 7th most targeted nation for Web Application Attacks: Akamai ReportFeb 21, 2018India’s financial industry saw a sharp increase in the number of Distributed Denial of Service (DDoS) attacks in 2017, experiencing 298 DDoS attacks against 37 distinct organisations in the last quarter. The DDoS attacks can bring down websites, disrupt businesses, and divert resources, sometimes serving as cover for more insidious data or systems breaches.UP government signs 900 MoUs ahead of Investors Summit 2018Feb 20, 2018According to the UP’s Industry Minister Satish Mahana, more than 900 MOUs have been signed so far. He claimed that this is the highest number of agreements that have ever been signed with private companies.Ministry of Railways extends upper age limit for ongoing recruitmentFeb 20, 2018The Indian Railways has decided to increase the upper age limit for its ongoing recruitment process for Group C Level-1 and Level-2 posts. The Ministry stated that the last date for submission of the applications will also be extended suitably.India, Iran sign MoU to avoid Double TaxationFeb 19, 2018India and Iran have signed 9 agreements to strengthen their cultural ties, boost connectivity and trade and expand cooperation in various sectors including health, medicine, agriculture, traditional systems of medicine and postal cooperation.PNB’s $1.8 Billion Scam: ExplainedFeb 15, 2018State-owned lender, Punjab National Bank has suspended 10 of its officers and lodged a complaint against celebrity jewellery designer Nirav Modi for committing fraudulent transactions worth over USD 1.77 billion in one of its Mumbai branches.RBI announces Revised Framework for Resolution of Stressed Assets; withdraws CDR, SDR, S4A and JLFFeb 13, 2018Through the new set of rules, the RBI aims at creating a harmonised and simplified generic framework for resolution of bad loans. This will force lenders to identify and tackle any stressed-asset accounts more rapidly.India Post Payments Bank to enable Digital Payments in Post Offices by April 2018Feb 10, 2018IPPB plans to leverage the unparalleled reach of the India Post network to achieve a Pan India roll out of 650 branches by 2018.CCEA approves enhancement of target under Pradhan Mantri Ujjwala YojanaFeb 8, 2018The Cabinet also approved expansion of the Scheme to cover all SC/ST households, beneficiaries of PMAY (Gramin) and Antyoday Anna Yojana (AAY), Forest dwellers, Most Backward Classes (MBC), Tea and Ex-Tea Garden Tribes, people residing in Islands and rivers, SECC identified households, etc.IBBI amends IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016Feb 7, 2018The Resolution Professional shall appoint two registered valuers to determine the fair value and the liquidation value of the corporate debtor. After the receipt of resolution plans, the resolution professional shall provide the fair value and the liquidation value to each member of the committee of creditors in electronic form, on receiving a confidentiality undertaking.In Detail: Union Budget 2018-19 and Economic SurveyFeb 3, 2018The Union Finance Minister Arun Jaitley on 1 February 2018 presented the Union Budget 2018 in the parliament. In the independent India, this is the 88th budget and the fifth of the Modi Sarkar.Key takeaways from Union Budget 2018Feb 2, 2018NITI Aayog will establish a National Programme to direct government's efforts in the area of Artificial Intelligence towards national development. The government will also explore use of blockchain technology proactively to boost digital economy. However, the government will not consider cryptocurrency as legal tender.India joins Ashgabat agreementFeb 2, 2018India has joined the Ashgabat agreement which envisages the establishment of an international transport and transit corridor linking Central Asia with the Persian Gulf to significantly ramp up trade and investment.Union Budget 2018: Fiscal Expenditure & Taxation ReformsFeb 1, 2018No changes in personal income tax slabs. Majorly, the personal income tax collection comes from the salaried class. Around 1.89 crore returns were filed in 2017 and Rs 1.44 lakh crore was paid as taxes.Union Budget 2018: Major HighlightsFeb 1, 2018This year's budget session is crucial as it comes after government's two big financial decisions - demonetisation and the implementation of Goods and Services Tax. It will be also NDA government's last full budget presentation before next year's Lok Sabha elections.Union Budget 2018: Health, MSME and Social WelfareFeb 1, 2018National Health Protection Scheme will be launched to cover 10 crore poor and vulnerable families. Under this, up to Rs 5 lakh will be provided to each family per year in secondary and tertiary care institutions. This scheme will have 50 crore beneficiaries. This scheme will generate lakhs of jobs, particularly for women.Union Budget 2018: Financial SectorFeb 1, 2018Emoluments will revised for the President to Rs 5 lakh, Rs 4lakh for Vice-President and Rs 3.5 lakh per month for Governors. Emoluments to MPs will be refixed with effect from April 1, 2018. The law will provide automatic revision of emoluments of MPs after every five years, indexed to inflation.Union Budget 2018: Education SectorFeb 1, 2018the Union Budget 2018 proposes to treat education holistically without segmentation from pre-nursery to Class 12. To improve the quality of teachers and education, the government would be initiating an integrated B.Ed. programme for the teachers.Union Budget 2018: Agriculture SectorFeb 1, 2018Under the Union Budget 2018, the government would be doubling the farmer’s income by 2022 and would be working with the states to ensure that all farmers get a fair price for their produce.Union Budget 2018: UnderprivilegedFeb 1, 2018Under the underpriviledged sector in Union Budget 2018, the government plans to build houses for all the poor in the country by 2022. To ensure the same, it launched the Pradhan Mantri Awas Yojana in rural and urban areas of the country.India and ADB sign USD 250 million loan to improve rural connectivity in five statesJan 31, 2018This investment program is an addition to the USD 800 million ADB-financed first Rural Connectivity Investment Program in 2012 that added about 9000 kilometres of all-weather rural roads in the same States.India ranked as 6th wealthiest country in the world: ReportJan 31, 2018A report by New World Wealth has ranked India in the sixth position in the list of wealthiest countries. It noted that India was the best-performing wealth market globally in 2017, as its total wealth increased from USD 6,584 billion in 2016 to USD 8,230 billion in 2017, registering a 25 per cent growth.Union Budget 2018: Everything ExplainedJan 31, 2018The union budget is an important part of Indian economy and polity. There are some changes in the budget due to its merger with railway budget. We have elaborated the entire constitutional procedure of the budget that how it is formed and presented.Centre launches GeM 3.0 with enhanced featuresJan 31, 2018The third version of the Government e-Marketplace, GEM 3.0, envisaged by the Union Government as the National Procurement Portal of India has been launched.Economic Survey 2017-18: Ease of Doing Business’ Next Frontier-Timely JusticeJan 30, 2018The government’s efforts to make business and commerce easy have been widely acknowledged. The next frontier on the ease of doing business is addressing pendency, delays and backlogs in the appellate and judicial arenas. Coordinated action between government and the judiciary-- a kind of horizontal Cooperative Separation of Powers to complement vertical Cooperative Federalism between the central and state governments would address the “Law’s delay” and boost economic activity.Economic Survey 2017-18: Top 10 facts on Indian EconomyJan 30, 2018The new Economic survey of 2017-18 reveals that there has been a 50 per cent increase in unique taxpayers under the GST in comparison with the pre-GST system and also a boost in exports of ready-made garments.Economic Survey 2017-18: Key HighlightsJan 30, 2018The Economic Survey 2017-18 was tabled in the Parliament on January 29, 2018 by Union Finance Minister Arun Jaitley. Major reforms were undertaken in 2017 including the launch of the transformational Goods and Services Tax (GST) in July.India, ASEAN member states release joint statement ‘Delhi Declaration’Jan 27, 2018India hosted the leaders of the ten member states of the Association of Southeast Asian Nations (ASEAN) for two-day ASEAN-India Commemorative Summit that began on January 25, 2018 in New Delhi, under the theme of ‘Shared Values, Common Destiny’.Small Finance Banks, Payments Banks to offer Atal Pension YojanaJan 27, 2018The Union Government has allowed Small Finance Banks and Payments Banks to offer Atal Pension Yojana (APY). The Small Finance Banks and Payment Banks are new age banks and given the strength, expertise and reach of these banks, they can play a pivotal role in the outreach of subscribers under APY.India ranked 81st on Global Talent Competitiveness IndexJan 24, 2018India has been ranked 81st on the annual global index of talent competitiveness, which was released on the first day of the 48th World Economic Forum (WEF) annual meeting in Davos, Switzerland.India to surpass China as fastest growing large economy in 2018Jan 22, 2018The Sanctum Wealth Management report predicts that India will become the fastest growing large economy in the world in 2018, surpassing even China and the country’s equity market will jump to become the fifth largest in the world.GST Council cuts rate on 82 goods and services, introduces measures against tax evasionJan 20, 2018The 25th GST Council meeting chaired by Finance Minister Arun Jaitley has recommended rate cuts on 83 items including 53 services and 29 goods and the introduction of ‘anti-evasion measures’ to take care of faltering indirect tax revenue.Department of Commerce, CII sign MoU for development of Logistics sectorJan 17, 2018The Department of Commerce has signed a Memorandum of Understanding (MoU) with the Confederation of Indian Industry (CII) for setting-up of an institutional mechanism for the integrated development of Logistics sector in the country.Cabinet approves continuation of MPLAD Scheme beyond 12th PlanJan 10, 2018The Cabinet Committee on Economic Affairs (CCEA) led by the Prime Minister has given its nod to the continuation of Members of Parliament Local Area Development Scheme (MPLADS) till the term of the 14th Finance Commission i.e. 31st March 2020.India to regain top spot with GDP pegged at 7.3% in 2018-19: World BankJan 10, 2018According to the World Bank’s Global Economic Prospects report, India’s economy will grow by 6.7% during the current fiscal year, higher than the 6.5% estimate by the Indian government. The report said that With this growth, India is set to regain the top spot in world's fastest-growing economies.RBI introduces Rs 10 banknote in Mahatma Gandhi (New) SeriesJan 5, 2018The new denomination has motif of Sun Temple, Konark on the reverse, depicting the country's cultural heritage. The base colour of the note is Chocolate Brown. The dimension of the banknote will be 63 mm x 123 mm.GOI launches 7.75% Savings (Taxable) Bonds, 2018Jan 5, 2018The Government of India has launched 7.75% Savings (Taxable) Bonds, 2018 scheme to enable resident citizens/HUF to invest in a taxable bond, without any monetary ceiling. This new saving scheme will commenced on 10th January 2018.CCEA approves construction, operation and maintenance of Zojila tunnel in J&KJan 4, 2018The construction of this tunnel will provide all weather connectivity between Srinagar, Kargil and Leh and will bring about all round economic and socio-cultural integration of these regions. The project excludes approaches on Srinagar-Leh section connecting NH-1A at Km 95.00 and at Km 118.00.CCEA approves mandatory packaging of foodgrains in Jute MaterialsJan 4, 2018CCEA approved the mandatory packaging norms under the Jute Packaging Material (JPM) Act, 1987. The approval mandates that 90 per cent of the food grains and 20 per cent of the sugar products shall be mandatorily packed in jute bags. It's provision for 100 per cent packing of food grains in jute bags is subjected to the ability of the jute industry to meet the requirement.Government notifies terms of Electoral BondsJan 3, 2018In a bid to cleanse the system of political funding in the country, the Government of India notified the Scheme of Electoral Bonds. With the issuance of electoral bonds, the donors can purchase electoral bonds from specific State Bank of India (SBI) branches, and receiving political parties can encash them only through a designated bank account.Saudi Arabia, UAE become first Gulf nations to introduce VATJan 2, 2018Saudi Arabia and the United Arab Emirates (UAE) introduced the Value Added Tax (VAT) for the very first time on 1 January 2018. The move is a first for the Gulf region, which has long boasted of a tax-free system.India signs USD 40 Million Loan Agreement with World Bank for UP TourismDec 29, 2017The Project will support the state government’s priority of re-structuring tourism benefiting poor residents and local entrepreneurs such as rickshaw drivers, local artisans and street vendors.India signs US$ 125 million worth financing agreement with World BankDec 20, 2017India has signed a financing agreement worth US$ 125 million with the World Bank for ‘Skills Strengthening for Industrial Value Enhancement Operation (Strive) Project”.Niti Aayog to set up Methanol Economy FundDec 20, 2017The Niti Aayog is planning to set up a Methanol Economy Fund with a corpus of Rs 4,000-5,000 crore to promote production and use of the clean fuel. Methanol can be used as a transportation fuel, energy producing fuel and cooking fuel. It could play a huge role in bringing down India’s oil import bill by an estimated 20% over the next few years.CBDT extends deadline for linking of Aadhaar with PAN to 31 March 2018Dec 8, 2017All taxpayers having Aadhaar Number or Enrolment Number are required to link Aadhaar with Permanent Account Number as per the provisions of recently introduced section 139AA of the Income-tax Act, 1961.RBI releases Fifth Bi-monthly Monetary Policy Statement 2017-18Dec 7, 2017After assessing the current and evolving macroeconomic situation in the economy, the Monetary Policy Committee (MPC) decided to keep the Repo Rate under the Liquidity Adjustment Facility (LAF) unchanged at 6.0 per cent. Consequently, the Reverse Repo Rate was also kept unchanged at 5.75 per cent and the Marginal Standing Facility (MSF) Rate and the Bank Rate remained at 6.25 per cent.RBI rationalises charges on debit card transactionsDec 7, 2017The Reserve Bank of India, In order to promote digital payments, came out with differentiated merchant discount rates (MDR) for debit card transactions, prescribing separate caps for small and large traders. The shift is aimed at giving a boost to the digital transactions in the country, as the government is not seeing any expected result despite giving a major thrust to digital payments.India submits document to oppose e-commerce talks at WTODec 4, 2017India has for the first time submitted a formal document opposing any talks on e-commerce at the World Trade Organisation (WTO). The submission comes ahead of the key ministerial conference of the WTO, where India is likely to face pressure from many countries to begin talks to open cross-border digital trade. The document submitted by India at WTO is a proposed agreement that could become an actual announcement if enough members are in agreement with it and pertinent changes are made to it to suit all.Finance Minister Arun Jaitley launches Paytm Payments BankNov 30, 2017Paytm Payments Bank aims to bring Indians into 'digital economy'. With the launch of the Bank, Paytm account holders can enjoy the benefits like zero-balance account, free IMPS, NEFT, RTGS, UPI transactions and a complimentary virtual Rupay cards for online transactions.15th Finance Commission constituted under the chairmanship of NK SinghNov 28, 2017The other members of the 15th Finance Commission are Shaktikanta Das, former Secretary to Union Government and Anoop Singh, Adjunct Professor at Georgetown University. While, Chairman of Bandhan Bank Ashok Lahiri and Member of NITI Aayog Ramesh Chand will be the Part time members of the Commission. Arvind Mehta will be the Secretary to the Commission.CCEA approves expansion of Beti Bachao Beti Padhao for Pan India coverageNov 23, 2017The expansion includes Multi sectoral intervention in 244 districts in addition to existing 161 districts and 235 districts will be covered through Alert District Media, Advocacy and Outreach.Cabinet approves setting up of the 15th Finance CommissionNov 23, 2017The Union Cabinet led by Prime Minister Narendra Modi has approved the setting up of the 15th Finance Commission. The decision was a constitutional obligation under Article 280 (1) of the Constitution. The Terms of Reference for the 15th Finance Commission will be notified soon.Moody's upgrades India's sovereign rating after 14 yearsNov 17, 2017US credit rating agency Moody's raised India's sovereign rating to Baa2 from its lowest investment grade of Baa, while changing the outlook for the country's rating to stable from positive. Since 2004, Moody raised the sovereign rating for the first time ignoring a haze of short-term economic uncertainties to bet on the nation’s prospects from a raft of policy changes by the government.Cabinet approves the establishment of the National Anti-profiteering Authority under GSTNov 17, 2017The Union Cabinet led by the Prime Minister Narendra Modi has given its consent for the creation of the posts of Chairman and Technical Members of the National Anti-profiteering Authority (NAA) under GST. The decision was followed up immediately after the sharp reduction in the GST rates of a large number of items of mass consumption. This paves the way for the immediate establishment of this apex body, which is mandated to ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices.Union Government launches BHARAT-22 Exchange Traded FundNov 15, 2017Union Government's key Economic Reforms may also benefit ETF. These reforms are Insolvency and Bankruptcy Code 2016, Digital Economy, Bank recapitalization, GST, Liberalization of FDI, Introduction of Daily Fuel pricing, Revival package for DISCOMs, etc.India to be third largest economy by 2028, says reportNov 14, 2017India is likely to achieve strong growth over the next decade and emerge as the world’s third-largest economy, overtaking Japan in nominal GDP by 2028, says a report titled ‘India 2028’ by Bank of America Merrill Lynch.Cabinet approves Joint Interpretative Declaration between India and ColombiaNov 12, 2017The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval for signing the Joint Interpretative Declaration (JID) between India and Colombia.RBI directs banks to provide doorstep banking facilities to senior citizens, differently-abledNov 10, 2017The Reserve Bank of India has asked banks to provide doorstep banking facilities to senior citizens who are more than 70 years of age and differently-abled persons by December 2017.GST rate on various mass consumption items reduced to 18 per centNov 10, 2017All types of chewing gum, chocolates, preparation for facial make-up, shaving and after-shave items, shampoo deodorants, washing powder detergent and granite and marble will now attract 18 per cent GST rate.RBI to launch public awareness campaign through text messagesNov 9, 2017The Reserve Bank of India would soon be launching a new public awareness campaign through text messages to educate public about various banking regulations and available facilities.India slips to 7th position in Business Optimism RankingNov 9, 2017According to the most recent Grant Thornton International Business Report India has slipped to the 7th position in the Business Optimism Index (BOI) in the September quarter, from the second position in the previous three months. The survey suggests that this ranking is showing the clear signs of lag in the economy.Haryana government signs Rs 20,000 Cr worth MoU to set up trading hubNov 3, 2017The state government Haryana on 2 November 2017 signed a memorandum of understanding (MoU) with an integrated trade facilitation services organisation - Verbind - to set up a logistics and trading hub in the state.CBDT notifies rules for furnishing Master File and Country-by-Country ReportNov 2, 2017The report of Master File needs to be submitted in Form 3CEAA and the Country-by-Country Report in Form 3CEAD. An international group having multiple Indian constituent entities can designate one constituent entity to furnish the Master File.PFRDA increases maximum age of joining under NPS-Private Sector to 65 yearsNov 2, 2017With this, any Indian Citizen, resident or non-resident, between the age of 60- 65 years can now join NPS and continue up to the age of 70 years in NPS. Moreover, the subscribers who are willing to join NPS at the later stage of life will be able to avail the benefits of NPS.CCEA approves Special Banking Arrangement for payment to fertilizer companiesNov 2, 2017Union Government is making fertilizers available to farmers at subsidized prices through fertilizer manufacturers or importers. For making funds available to the fertilizer companies against the subsidy claims, Union Ministry of Finance had approved SBA for an amount of Rs 10000 crore with Government interest liability limited to G-Sec rate.World Bank releases Doing Business Report 2018: India ranks 100 among 190 countriesNov 1, 2017India jumped over 30 ranks this year to attain 100th spot in the ease of doing business list. It was ranked at 130th position in the 2017 Doing Business Report. India is the only country in South Asia and BRICS economies to feature among most improved economies of the DB Report this year.Union Government constitutes Arun Jaitley led committee to oversee PSU bank mergersNov 1, 2017Earlier in 2017 itself, the banking sector witnessed the consolidation of State Bank of India (SBI), which merged operations of its five associate banks and Bharatiya Mahila Bank with itself, marking the first consolidation move following the bad loan crisis.India sends first shipment to Afghanistan through Iran’s Chabahar portOct 30, 2017India has sent its first consignment of wheat to Afghanistan through Iran’s Chabahar port. The move has been seen as a landmark one to operationalise the new strategic transit route, bypassing Pakistan. The shipment was flagged off from Kandla port in Gujarat by Indian External Affairs Minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbani.India imposes anti-dumping duty on stainless steel from US, EU and ChinaOct 26, 2017India has imposed anti-dumping duty on certain stainless steel products from the European Union and other nations including China and Korea, in order to protect the domestic industry from cheap imports.Qatar to introduce minimum wage for workersOct 26, 2017Qatar has announced that it would be introducing a minimum wage for workers. The country has been under global scrutiny over its alleged ill-treatment of migrant labourers.RBI sets up task force on Public Credit RegistryOct 24, 2017The task force will be headed by YM Deosthalee, ex-CMD of L&T Finance Holdings. The other members of the task force are Sekar Karnam, Vishaka Mulye, Rashesh Shah, Sriram Kalyanaraman, Bidisha Ganguly, Sharad Sharma, Vivek Srivastava, Parvathy V. Sundaram and Anujit Mitra.GSTN launches offline option for GSTR-3B returns filingOct 23, 2017This offline facility will provide an opportunity to the taxpayer to verify the details of GSTR 3B before filing GSTR-3B returns and minimise chances of error. It is designed to help taxpayers to prepare their GSTR-3B return on their computer system.Banks to now match original IDs with photocopies: PMLAOct 23, 2017The Government has set a mandatory rule for banks and financial institutions (FIs) to check the original identification documents of individual person dealing in cash above the prescribed threshold of fifty thousand rupees, to tackle the use of forged or fake copies.Three- pronged approach for structural reform in India: IMFOct 14, 2017The IMF has suggested a 3-pronged approach for structural reform in India that includes Addressing the banking and corporate sector weaknesses, continued fiscal consolidation through revenue measure, and Improving the efficiency of labour and product markets.Union Minister launches Sampoorna Bima Gram YojanaOct 13, 2017The Union Minister for Communications, Manoj Sinha has launched the Sampoorna Bima Gram Yojana, an initiative for expansion of client base of Postal Life Insurance. The main objective of the scheme is to cover all households in the identified Sampoorna Bima Gram village.RBI introduces strict KYC guidelines for Prepaid Payment InstrumentsOct 13, 2017RBI has announced a fresh guideline on the issuance and operation of PPI (Prepaid Payment Instruments). It has also has issued stricter Know Your Customer (KYC) norms for the users of prepaid instrument or mobile wallets. With these guidelines to complete full KYC formalities, the mobile wallet user can now send-receive money between wallets of different companies and banks seamlessly through Unified Payments Interface (UPI).

The Reserve Bank of India (RBI) is India's central banking institution, which controls the issuance and supply of the Indian rupee. Until the Monetary Policy Committee was established in 2016, it also controlled monetary policy in India.[6]It commenced its operations on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934.[7]The original share capital was divided into shares of 100 each fully paid, which were initially owned entirely by private shareholders.[8]Following India's independence on 15 August 1947, the RBI was nationalised on 1 January 1949.[9]The RBI plays an important part in the Development Strategy of the Government of India. It is a member bank of the Asian Clearing Union. The general superintendence and direction of the RBI is entrusted with the 21-member central board of directors: the governor; four deputy governors; two finance ministry representatives (usually the Economic Affairs Secretary and the Financial Services Secretary); ten government-nominated directors to represent important elements of India's economy; and four directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and the capital New Delhi. Each of these local boards consists of five members who represent regional interests, the interests of co-operative and indigenous banks.The central bank was an independent apex monetary authority which regulates banks and provides important financial services like storing of foreign exchange reserves, control of inflation, monetary policy report till August 2016. A central bank is known by different names in different countries. The functions of a central bank vary from country to country and are autonomous or quasi-autonomous body and perform or through another agency vital monetary functions in the country. A central bank is a vital financial apex institution of an economy and the key objects of central banks may differ from country to country still they perform activities and functions with the goal of maintaining economic stability and growth of an economy.[10]The bank is also active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion (AFI). The bank is often referred to by the name Mint Street.[11]RBI is also known as banker's bank.Contents1 Preamble2 History 2.1 1935–1949 2.2 1950–1960 2.3 1961–1968 2.4 1969–1984 2.5 1985–1990 2.6 1991–1999 2.7 Since 20003 Structure4 Branches and support bodies5 Functions 5.1 Financial Supervision 5.2 Regulator and supervisor of the financial system 5.3 Regulator and Supervisor of the Payment and Settlement Systems 5.4 Banker and Debt Manager to Government 5.5 Managing foreign exchange 5.6 Issue of currency 5.7 Banker's bank 5.8 Regulator of the Banking System 5.9 Detection of fake currency 5.10 Developmental role 5.11 Related functions 5.12 Custodian to foreign exchange6 2016 Demonetisation 6.1 Cash crunch and effects7 Policy Rates and Reserve Ratios 7.1 Repo Rate 7.2 Reverse Repo Rate (RRR) 7.3 Statutory liquidity ratio (SLR) 7.4 Bank Rate 7.5 Liquidity Adjustment Facility (LAF) 7.6 Cash Reserve Ratio (CRR) 7.7 Open Market Operation (OMO) 7.8 Marginal Standing Facility (MSF)8 Qualitative Tools 8.1 Margin Requirements or LTV 8.2 Selective credit control 8.3 Moral Suasion9 Limitations of Monetary Policy10 Publications11 References12 Further reading13 External linksPreambleThe preamble of the Reserve Bank of India describes the basic functions of the reserve bank as:"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."HistoryA 2010 stamp dedicated to the 75th anniversary of the Reserve Bank of IndiaThe Reserve Bank of India was established following the Reserve Bank of India Act of 1934.[12]Though privately owned initially, it was nationalised in 1949 and since then fully owned by Government of India (GoI).1935–1949Reserve Bank of India-10 Rupees (1938), first year of banknote issue.The Reserve Bank of India was founded on 1 April 1935 to respond to economic troubles after the First World War.[13]The Reserve Bank of India was conceptualized based on the guidelines presented by the Central Legislative Assembly which passed these guidelines as the RBI Act 1934.[14]RBI was conceptualized as per the guidelines, working style and outlook presented by Dr. B. R. Ambedkar in his book titled “The Problem of the Rupee – Its origin and its solution” and presented to the Hilton Young Commission. The bank was set up based on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the Hilton–Young Commission.[15]The original choice for the seal of RBI was The East India Company Double Mohur, with the sketch of the Lion and Palm Tree. However, it was decided to replace the lion with the tiger, the national animal of India. The Preamble of the RBI describes its basic functions to regulate the issue of bank notes, keep reserves to secure monetary stability in India, and generally to operate the currency and credit system in the best interests of the country. The Central Office of the RBI was established in Calcutta (now Kolkata) but was moved to Bombay (now Mumbai) in 1937. The RBI also acted as Burma's (now Myanmar) central bank until April 1947 (except during the years of Japanese occupation (1942–45)), even though Burma seceded from the Indian Union in 1937. After the Partition of India in August 1947, the bank served as the central bank for Pakistan until June 1948 when the State Bank of Pakistan commenced operations. Though set up as a shareholders’ bank, the RBI has been fully owned by the Government of India since its nationalization in 1949.[16]RBI has monopoly of note issue.1950–1960In the 1950s, the Indian government, under its first Prime Minister Jawaharlal Nehru, developed a centrally planned economic policy that focused on the agricultural sector. The administration nationalized commercial banks[17]and established, based on the Banking Companies Act, 1949 (later called the Banking Regulation Act), a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support economic plan with loans.[18]1961–1968As a result of bank crashes, the RBI was requested to establish and monitor a deposit insurance system. Meant to restore the trust in the national bank system, it was initialized on 7 December 1961. The Indian government founded funds to promote the economy, and used the slogan "Developing Banking". The government of India restructured the national bank market and nationalized a lot of institutes. As a result, the RBI had to play the central part in controlling and supporting this public banking sector.1969–1984In 1969, the Indira Gandhi-headed government nationalized 14 major commercial banks. Upon Indira Gandhi's return to power in 1980, a further six banks were nationalized.[15]The regulation of the economy and especially the financial sector was reinforced by the Government of India in the 1970s and 1980s.[19]The central bank became the central player and increased its policies a lot for various tasks like interests, reserve ratio and visible deposits.[20]These measures aimed at better economic development and had a huge effect on the company policy of the institutes. The banks lent money in selected sectors, like agricultural business and small trade companies.[21]The Banking Commission was established on Wednesday, 29 January 1969, to analyze banking costs, effects of legislations and banking procedures, including non banking financial intermediaries and indigenous banking on Government of India economy; with Mr. R.G. Saraiya as the chairman.[22][23][24]The branch was forced to establish two new offices in the country for every newly established office in a town.[25]The oil crises in 1973 resulted in increasing inflation, and the RBI restricted monetary policy to reduce the effects.[26]1985–1990A lot of committees analysed the Indian economy between 1985 and 1991. Their results had an effect on the RBI. The Board for Industrial and Financial Reconstruction, the Indira Gandhi Institute of Development Research and the Security & Exchange Board of India investigated the national economy as a whole, and the security and exchange board proposed better methods for more effective markets and the protection of investor interests. The Indian financial market was a leading example for so-called "financial repression" (Mckinnon and Shaw).[20]The Discount and Finance House of India began its operations in the monetary market in April 1988; the National Housing Bank, founded in July 1988, was forced to invest in the property market and a new financial law improved the versatility of direct deposit by more security measures and liberalisation.[27]1991–1999The national economy contracted in July 1991 as the Indian rupee was devalued.[28]The currency lost 18% of its value relative to the US dollar, and the Narsimham Committee advised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio. New guidelines were published in 1993 to establish a private banking sector. This turning point was meant to reinforce the market and was often called neo-liberal.[19]The central bank deregulated bank interests and some sectors of the financial market like the trust and property markets.[29]This first phase was a success and the central government forced a diversity liberalisation to diversify owner structures in 1998.[20]The National Stock Exchange of India took the trade on in June 1994 and the RBI allowed nationalized banks in July to interact with the capital market to reinforce their capital base. The central bank founded a subsidiary company—the Bharatiya Reserve Bank Note Mudran Private Limited—on 3 February 1995 to produce banknotes.[30]Since 2000The Foreign Exchange Management Act, 1999 came into force in June 2000. It should improve the item in 2004–2005 (National Electronic Fund Transfer).[31]The Security Printing & Minting Corporation of India Ltd., a merger of nine institutions, was founded in 2006 and produces banknotes and coins.[32]The national economy's growth rate came down to 5.8% in the last quarter of 2008–2009[33]and the central bank promotes the economic development.[34]In 2016, the Government of India amended the RBI Act to establish the Monetary Policy Committee (MPC) to set . This limited the role of the RBI in setting interest rates, as the MPC membership is evenly divided between members of the RBI (including the RBI governor) and independent members appointed by the government. However, in the event of a tie, the vote of the RBI governor is decisive.[6]StructureRBI runs a monetary museum in MumbaiThe central board of directors is the main committee of the central bank. The Government of India appoints the directors for a four-year term. The Board consists of a governor, and not more than four deputy governors; four directors to represent the regional boards;[35]2 — usually the Economic Affairs Secretary and the Financial Services Secretary — from the Ministry of Finance and 10 other directors from various fields. The Reserve Bank — under Raghuram Rajan's governorship — wanted to create a post of a chief operating officer (COO), in the rank of deputy governor and wanted to re-allocate work between the five of them (four deputy governor and COO).[36][37]The bank is headed by the governor, currently Shaktikanta Das.[1]There are four deputy governors BP Kanungo,[38]N S Vishwanathan, Viral Acharya and Mahesh Kumar Jain.[39]Two of the four deputy governors are traditionally from RBI ranks and are selected from the Bank's Executive Directors. One is nominated from among the Chairpersons of public sector banks and the other is an economist. An Indian Administrative Service officer can also be appointed as deputy governor of RBI and later as the governor of RBI as with the case of Y. Venugopal Reddy and Duvvuri Subbarao. Other persons forming part of the central board of directors of the RBI are Dr. Nachiket Mor, Y C Deveshwar, Prof Damodar Acharya, Ajay Tyagi and Anjuly Duggal.Uma Shankar, chief general manager (CGM) in charge of the Reserve Bank of India's financial inclusion and development department has taken over as executive director (ED) in the central bank.[citation needed]Sudha Balakrishnan, a former vice president at National Securities Depository Limited, assumed charge as the first chief financial officer (CFO) of the Reserve Bank on 15 May 2018; she was given the rank of an executive director.[40]Branches and support bodiesRBI Headquarters in Mumbai[41]The Reserve Bank building as seen from the Chennai Suburban Railway linesThe RBI has four regional representations: North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. The representations are formed by five members, appointed for four years by the central government and with the advice of the central board of directors serve as a forum for regional banks and to deal with delegated tasks from the Central Board.[42]It has two training colleges for its officers, viz. Reserve Bank Staff College, Chennai and College of Agricultural Banking, Pune. There are three autonomous institutions run by RBI namely National Institute of Bank Management (NIBM), Indira Gandhi Institute of Development Research (IGIDR), Institute for Development and Research in Banking Technology (IDRBT).[43]There are also four Zonal Training Centres at Mumbai, Chennai, Kolkata and New Delhi.The Board of Financial Supervision (BFS), formed in November 1994, serves as a CCBD committee to control the financial institutions. It has four members, appointed for two years, and takes measures to strength the role of statutory auditors in the financial sector, external monitoring and internal controlling systems. The Tarapore committee was set up by the Reserve Bank of India under the chairmanship of former RBI deputy governor S. S. Tarapore to "lay the road map" to capital account convertibility. The five-member committee recommended a three-year time frame for complete convertibility by 1999–2000.On 8 December 2017, Surekha Marandi, Executive Director (ED) of Reserve Bank of India, said RBI will open an office in the north-eastern state of Arunachal Pradesh[44]FunctionsReserve Bank of India regional office, Delhi entrance with the Yakshini sculpture depicting "Prosperity through agriculture".[45]The regional office of RBI (right) in front of GPO (left) at Dalhousie Square, Kolkata.The central bank of any country executes many functions such as overseeing monetary policy, issuing currency, managing foreign exchange, working as a bank for government and as a banker of scheduled commercial banks. It also works for overall economic growth of the country. The preamble of the Reserve Bank of India describes its main functions as:..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.Financial SupervisionThe primary objective of RBI is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies.The Board is constituted by co-opting four Directors from the Central Board as members for a term of two years and is chaired by the governor. The deputy governors of the reserve bank are ex-officio members. One deputy governor, usually, the deputy governor in charge of banking regulation and supervision, is nominated as the vice-chairman of the board. The Board is required to meet normally once every month. It considers inspection reports and other supervisory issues placed before it by the supervisory departments.BFS through the Audit Sub-Committee also aims at upgrading the quality of the statutory audit and internal audit functions in banks and financial institutions. The audit sub-committee includes deputy governor as the chairman and two Directors of the Central Board as members. The BFS oversees the functioning of Department of Banking Supervision (DBS), Department of Non-Banking Supervision (DNBS) and Financial Institutions Division (FID) and gives directions on the regulatory and supervisory issues.Regulator and supervisor of the financial systemThe institution is also the regulator and supervisor of the financial system and prescribes broad parameters of banking operations within which the country's banking and financial system functions. Its objectives are to maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public. The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply, monitors economic indicators like the gross domestic product and has to decide the design of the rupee banknotes as well as coins.[46]Regulator and Supervisor of the Payment and Settlement SystemsPayment and settlement systems play an important role in improving overall economic efficiency. The Payment and Settlement Systems Act of 2007 (PSS Act)[47]gives the Reserve Bank oversight authority, including regulation and supervision, for the payment and settlement systems in the country. In this role, the RBI focuses on the development and functioning of safe, secure and efficient payment and settlement mechanisms. Two payment systems National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) allow individuals, companies and firms to transfer funds from one bank to another. These facilities can only be used for transferring money within the country.NEFT operates on a deferred net settlement (DNS) basis and settles transactions in batches. The settlement takes place for all transactions received till a particular cut-off time. It operates in hourly batches — there are 12 settlements from 8 am to 7 pm on weekdays and SIX between 8 am and 1 pm on Saturdays.[48]Any transaction initiated after the designated time would have to wait till the next settlement time. In RTGS, transactions are processed continuously, all through the business hours. RBI's settlement time is 9 am to 4:30 pm on weekdays and 9 am to 2:00 pm on Saturdays.[49]Banker and Debt Manager to GovernmentJust like individuals need a bank to carry out their financial transactions effectively & efficiently, Governments also need a bank to carry out their financial transactions. RBI serves this purpose for the Government of India (GoI). As a banker to the GoI, RBI maintains its accounts, receive payments into & make payments out of these accounts. RBI also helps GoI to raise money from public via issuing bonds and government approved securities.Managing foreign exchangeThe central bank manages to reach different goals of the Foreign Exchange Management Act, 1999. Their objective is to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.With increasing integration of the Indian economy with the global economy arising from greater trade and capital flows, the foreign exchange market has evolved as a key segment of the Indian financial market and RBI has an important role to play in regulating & managing this segment. RBI manages forex and gold reserves of the nation.On a given day, the foreign exchange rate reflects the demand for and supply of foreign exchange arising from trade and capital transactions. The RBI's Financial Markets Department (FMD) participates in the foreign exchange market by undertaking sales / purchases of foreign currency to ease volatility in periods of excess demand for/supply of foreign currency.Issue of currencyReserve bank of India is the sole body who is authorized to issue currency in India. The bank also destroys the same when they are not fit for circulation. All the money issued by the central bank is its monetary liability, i.e., the central bank is obliged to back the currency with assets of equal value, to enhance public confidence in paper currency. The objectives are to issue bank notes and give public adequate supply of the same, to maintain the currency and credit system of the country to utilize it in its best advantage, and to maintain the reserves. RBI maintains the economic structure of the country so that it can achieve the objective of price stability as well as economic development because both objectives are diverse in themselves. For printing of notes, the Security Printing and Minting Corporation of India Limited (SPMCIL), a wholly owned company of the Government of India, has set up printing presses at Nashik, Maharashtra and Dewas, Madhya Pradesh. The Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), also has set up printing presses in Mysore in Karnataka and Salboni in West Bengal. In all, there are four printing presses.[50]And for the minting of coins, SPMCIL has four mints at Mumbai, Noida (UP), Kolkata and Hyderabad for coin production.[50]While coins and one rupee notes are minted by Government of India (GoI), the RBI works as an agent of GoI for distributing and handling of coins. RBI also works to prevent counterfeiting of currency by regularly upgrading security features of currency. For printing currency, RBI has four facilities at Dewas, Nasik, Mysore and Salboni. The RBI is authorized to issue notes up to value of Rupees ten thousands and coin up to one thousands. New notes of Rupees 500 and 2000 have been issued on 8 November 2016. The old series note of Rupees 1000 and 500 are considered illegal and just paper from midnight on 8 November 2016. Earlier 1000 notes have been discarded by RBI.Banker's bankNagpur branch holds most of India's gold deposits.[51][52][53][54]Reserve Bank of India also works as a central bank where commercial banks are account holders and can deposit money. RBI maintains banking accounts of all scheduled banks.[55]Commercial banks create credit. It is the duty of the RBI to control the credit through the CRR, bank rate and open market operations. As banker's bank, the RBI facilitates the clearing of cheques between the commercial banks and helps the inter-bank transfer of funds. It can grant financial accommodation to schedule banks. It acts as the lender of the last resort by providing emergency advances to the banks. It supervises the functioning of the commercial banks and takes action against it if the need arises. The RBI also advises the banks on various matters for example Corporate Social Responsibility.Regulator of the Banking SystemRBI has the responsibility of regulating the nation's financial system. As a regulator and supervisor of the Indian banking system it ensures financial stability & public confidence in the banking system. RBI uses methods like On-site inspections, off-site surveillance, scrutiny & periodic meetings to supervise new bank licenses, setting capital requirements and regulating interest rates in specific areas. RBI is currently focused on implementing norms.Detection of fake currencyIn order to curb the fake currency problem, RBI has launched a website to raise awareness among masses about fake notes in the market. www.paisaboltahai.rbi.org.in provides information about identifying fake currency.[56]On 22 January 2014; RBI gave a press release stating that after 31 March 2014, it will completely withdraw from circulation of all banknotes issued prior to 2005. From 1 April 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication. The reserve bank has also clarified that the notes issued before 2005 will continue to be legal tender. This would mean that banks are required to exchange the notes for their customers as well as for non-customers. From 1 July 2014, however, to exchange more than 15 pieces of `500 and `1000 notes, non-customers will have to furnish proof of identity and residence as well as show aadhar to the bank branch in which she/he wants to exchange the notes.This move from the reserve bank is expected to unearth black money held in cash. As the new currency notes have added security features, they would help in curbing the menace of fake currency.[57]Developmental roleThe central bank has to perform a wide range of promotional functions to support national objectives and industries.[18]The RBI faces a lot of inter-sectoral and local inflation-related problems. Some of these problems are results of the dominant part of the public sector.[58]Key tools in this effort include Priority Sector Lending such as agriculture, micro and small enterprises (MSE), housing and education. RBI work towards strengthening and supporting small local banks and encourage banks to open branches in rural areas to include large section of society in banking net.Related functionsThe RBI is also a banker to the government and performs merchant banking function for the central and the state governments. It also acts as their banker. The National Housing Bank (NHB) was established in 1988 to promote private real estate acquisition.[59]The institution maintains banking accounts of all scheduled banks, too. RBI on 7 August 2012 said that Indian banking system is resilient enough to face the stress caused by the drought-like situation because of poor monsoon this year.[60]Custodian to foreign exchangeThe Reserve Bank has custody of the country's reserves of international currency, and this enables the Reserve Bank to deal with crisis connected with adverse balance of payments position.2016 DemonetisationPeople gathered at ATM of Axis Bank in Mehsana, Gujarat to withdraw cash following deposit of demonetised currency notes in bank on 15 November 2016.Main article: 2016 Indian banknote demonetisationOn 8 November 2016, the Government of India announced the demonetisation of all ₹500 (US$7.00) and ₹1,000 (US$14) banknotes of the Mahatma Gandhi Series on the recommendation of the Reserve Bank of India (RBI).[61]The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.[62][63]The Reserve Bank of India laid down a detailed procedure for the exchange of the demonetised banknotes with new ₹500 and ₹2,000 banknotes of the Mahatma Gandhi New Series and ₹100 banknotes of the preceding Mahatma Gandhi Series. Following are the key points:Long queue in front of SBI ATM at Paravur near the city of Kollam in Kerala, 19 November 2016.Citizens will have until 30 December 2016 to tender their old banknotes at any office of the RBI or any bank branch and credit the value into their respective bank accounts.Cash withdrawals from bank accounts were restricted to ₹10,000 per day and ₹20,000 per week per account from 10 to 13 November 2016. This limit was increased to ₹24,000 per week from 14 November.[64][65]For immediate cash needs, the old banknotes could be exchanged for the new ₹500 and ₹2,000 banknotes as well as ₹100 banknotes over the counter of bank branches by filling up a requisition form along with a valid ID proof. It was announced that this facility would be available until 30 December 2016. Initially, the limit was fixed at ₹4,000 per person from 8 to 13 November 2016. This limit was increased to ₹4,500 per person from 14 to 17 November 2016.[64][65] The limit was reduced to ₹2,000 per person from 18 November 2016.[66] All exchange of banknotes was abruptly stopped from 25 November 2016.[67]Initially, all ATMs were dispensing banknotes of only ₹50 and ₹100 denominations and cash withdrawals from ATMs were restricted to ₹2000 per day.[68] From 14 November onwards, ATMs recalibrated to dispense new ₹500 and ₹2000 notes will allow a maximum withdrawal of ₹2,500 per day, while other ATMs dispensing banknotes of only ₹50 and ₹100 denominations will allow a maximum withdrawal of ₹2000 per day.[64][65]However, exceptions were given to petrol, CNG and gas stations, government hospitals, railway and airline booking counters, state-government recognised dairies and ration stores, and crematoriums to accept the old ₹500 and ₹1,000 banknotes until 11 November 2016, which was later extended to 14 November 2016 and once again to 24 November 2016.[69][70]International airports were also instructed to facilitate an exchange of notes amounting to a total value of ₹5,000 for foreign tourists and out-bound passengers.[71]Under the revised guidelines issued on 17 November 2016, families were allowed to withdraw ₹250,000 for wedding expenses from one account provided it was KYC compliant. The rules were also changed for farmers who are permitted to withdraw ₹25,000 per week from their accounts against crop loan.[66][72]Cash crunch and effectsQueue at an ATM for ₹100 banknotes in Howrah, on 8 November 2016, 22:23 (IST)People queue outside a private bank to deposit and exchange old ₹500 and ₹1000 banknotes in Kolkata on 10 November 2016.The scarcity of cash due to demonetisation led to chaos, and most people holding old banknotes faced difficulties exchanging them due to endless lines outside banks and ATMs across India, which became a daily routine for millions of people waiting to deposit or exchange the ₹500 and ₹1000 banknotes since 9 November.[73][74][75][76]ATMs were running out of cash after a few hours of being functional, and around half the ATMs in the country were non-functional.[74]Sporadic violence was reported in New Delhi, but there were no reports of any grievous injury,[77]people attacked bank premises and ATMs,[78][79][80][81][82][83]and a ration shop was looted in Madhya Pradesh after the shop owner refused to accept ₹500 banknotes.[84][85][86][87]Policy Rates and Reserve RatiosRates as of 6th bi-monthly (7 February 2019) monetary policy meet of FY1819[88]Policy ratesPolicy Repo Rate6.25%Reverse Repo Rate6.00%Marginal Standing Facility Rate6.50%Bank Rate6.50%Reserve ratiosCash Reserve Ratio (CRR)4%Statutory Liquidity Ratio (SLR)19.50%Lending and deposit rates[89]Base Rate8.95%–9.45%MCLR (overnight)8.15%–8.45%Savings Deposit Rate3.50%–4.00%Term Deposit Rate for > 1year6.25%–7.50%Repo RateRepo (Repurchase) rate also known as the benchmark interest rate is the rate at which the RBI lends money to the commercial banks for a short-term (max. 90 days). When the repo rate increases, borrowing from RBI becomes more expensive. If RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate similarly, if it wants to make it cheaper for banks to borrow money it reduces the repo rate. If the repo rate is increased, banks can't carry out their business at a profit whereas the very opposite happens when the repo rate is cut down. Generally, repo rates are cut down whenever the country needs to progress in banking and economy.If banks want to borrow money (for short term, usually overnight) from RBI then banks have to charge this interest rate. Banks have to pledge government securities as collateral. This kind of deal happens through a re-purchase agreement. If a bank wants to borrow Rs. 100 crores, it has to provide government securities at least worth Rs. 100 crore (could be more because of margin requirement which is 5%–10% of loan amount) and agree to repurchase them at Rs. 106.5 crore at the end of borrowing period. So the bank has paid Rs. 6.5 crore as interest. This is the reason it is called repo rate. The government securities which are provided by banks as collateral can not come from SLR quota (otherwise the SLR will go below 19.5% of NDTL and attract penalty). Banks have to provide these securities additionally.To curb inflation, RBI increases Repo rate which will make borrowing costly for banks. Banks will pass this increased cost to their customers which make borrowing costly in whole economy. Fewer people will apply for loan and aggregate demand will get reduced. This will result in inflation coming down. RBI does the opposite to fight deflation. Although when RBI reduce Repo rate, banks are not legally required to reduce their base rate.The RBI increased the Repo rate from 6% to 6.25% in June 2018.[90]Reverse Repo Rate (RRR)As the name suggest, reverse repo rate is just the opposite of repo rate. Reverse Repo rate is the short term borrowing rate at which RBI borrows money from banks. The reserve bank uses this tool when it feels there is too much money floating in the banking system. An increase in the reverse repo rate means that the banks will get a higher rate of interest from RBI. As a result, banks prefer to lend their money to RBI which is always safe instead of lending it to others (people, companies etc.) which is always risky.Repo Rate signifies the rate at which liquidity is injected into the banking system by RBI, whereas Reverse Repo rate signifies the rate at which the central bank absorbs liquidity from the banks. Currently, Reverse Repo Rate is pegged to be 0.25% below Repo Rate.Statutory liquidity ratio (SLR)Apart from the CRR, banks are required to maintain liquid assets in the form of gold, cash and approved securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans and advances, thus it is an anti-inflationary impact. A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities. In well-developed economies, central banks use open market operations—buying and selling of eligible securities by the central bank in the money market—to influence the volume of cash reserves with commercial banks and thus influence the volume of loans and advances they can make to the commercial and industrial sectors. In the open money market, government securities are traded at market-related rates of interest. The RBI is resorting more to open market operations in the more recent years. Generally, RBI usesMinimum margins for lending against specific securities.Ceiling on the amounts of credit for certain purposes.The discriminatory rate of interest charged on certain types of advances.Direct credit controls in India are of three types:Part of the interest rate structure, i.e., on small savings and provident funds, are administratively set.Banks are mandatory required to keep 19.50% of their NDTL (Net Demand and Time Liabilities) in the form of liquid assets.Banks are required to lend to the priority sectors to the extent of 40% of their advances.The share of net demand and time liabilities that banks must maintain in safe and liquid assets, such as government securities, cash and gold. Here it would be pertinent to mention the gold swap of July 2014.[91][92][93]The present SLR is 19.5%.Bank RateIt is defined in Sec 49 of RBI Act of 1934 as the ‘standard rate at which RBI is prepared to buy or rediscount bills of exchange or other commercial papers eligible for purchase'. When banks want to borrow long term funds from RBI, it is the interest rate which RBI charges to them. It is currently set to 6.75%[94](Second Bi-monthly Monetary Policy Statement, 2018–19). The bank rate is not used to control money supply these days. Although penal rates are linked to bank rate. If a bank fails to keep SLR or CRR then RBI will impose penalty & it will be 300 basis points above bank rate.Liquidity Adjustment Facility (LAF)Liquidity Adjustment facility was introduced in 2000. LAF is a facility provided by the Reserve Bank of India to scheduled commercial banks to avail of liquidity in case of need or to park excess funds with the RBI on an overnight basis against the collateral of Government securities. RBI accept application for a minimum amount of Rs.5 crore and in multiples of Rs. 5 crore thereafter. LAF enables liquidity management on a day-to-day basis. The operations of LAF are conducted by way of repurchase agreements called Repos & Reverse Repos.Cash Reserve Ratio (CRR)CRR refers to the ratio of bank's cash reserve balances with RBI with reference to the bank's net demand & time liabilities to ensure the liquidity & solvency of the scheduled banks. The share of net demand and time liabilities that banks must maintain as cash with RBI. The RBI has set CRR at 4%. 1% change in it today affects the economy with Rs. 1000000 crores. An increase sucks this amount from the economy, while a decrease injects this amount into the economy.So - Crazy Domains if a bank has 200 Crore of NDTL then it has to keep Rs. 8 Crore in cash with RBI. RBI pays no interest on CRR.Let's assume economy is showing inflationary trends & RBI wants to control this situation by adjusting SLR & CRR. If RBI increases SLR to 50% and CRR to 20% then bank will be left only with Rs. 60 crore for operations. Now it will be very difficult for bank to maintain profitability with such small capital. Bank will be left with no choice but to raise interest rate which will make borrowing costly. This will in turn reduce the overall demand & hence price will come down eventually.Open Market Operation (OMO)Open market operation is the activity of buying and selling of government securities in open market to control the supply of money in banking system. When there is excess supply of money, central bank sells government securities thereby sucking out excess liquidity. Similarly, when liquidity is tight, RBI will buy government securities and thereby inject money supply into the economy.Marginal Standing Facility (MSF)This scheme was introduced in May 2011 and all the scheduled commercial bank can participate in this scheme. Banks can borrow up to 2.5%[95]percent of their respective Net Demand and Time Liabilities. RBI receive application under this facility for a minimum amount of Rs. One crore and in multiples of Rs. One crore thereafter. The important difference with repo rate is that bank can pledge government securities from SLR quota (up to one percent). So even if SLR goes below 20.5%(RBI/2014-15/445 DBR.Ret.BC.70/12.02.001/2014-15, dt. 16 October 2016) by pledging SLR quota securities under MSF, bank will not have to pay any penalty. The MSF rate is set to 100 basis point above bank rate and currently is at 6.50% as of 1.6.17.[96][better source needed]Qualitative ToolsMargin Requirements or LTVLoan to Value is the ratio of loan amount to the actual value of asset purchased. RBI regulates this ratio so as to control the amount bank can lend to its customers. For example, if an individual wants to buy a car from borrowed money and the car value is Rs. 10 Lac, he can only avail a loan amount of Rs. 7 Lac if the LTV is set to 70%. RBI can decrease or increase to curb inflation or deflation respectively.Selective credit controlUnder this measure, RBI can specifically instruct banks not to give loans to traders of certain commodities e.g. sugar, edible oil, etc. This prevents speculations/ hoarding of commodities using money borrowed from banks.Moral SuasionUnder this measure RBI try to persuade bank through meetings, conferences, media statements to do specific things under certain economic trends. For example, when RBI reduces repo rate, it asks banks to reduce their base rate as well. Another example of this measure is to ask banks to reduce their Non-performing assets (NPAs).Limitations of Monetary PolicyIn developing countries like India, Monetary Policy fails to show immediate or no results because of below factors:People do not employ alternative investment options. A large section of society still depends on saving accounts, fixed deposits, Public Provident Fund for investment. Commercial banks have large deposits. RBI is not the main or even prominent money supplier for these banks. So whatever monetary action central bank takes has little or late impact on the economy.Many people in rural areas are out of banking net and whatever RBI does has no impact on their financial activities.Monsoon uncertainty adversely affects food production and thereby cause food inflation. Monetary Policy has no impact on food inflation.