Monetary Policy Framework Evolution in India
The shift towards a flexible inflation targeting framework and the constitution of a six-member Monetary Policy Committee (MPC) marked a significant reform in India's monetary policy. This structural change aimed to enhance transparency, accountability, and effectiveness in managing inflation.
Key Reform Year: 2016
This important transition occurred in the year 2016. The Reserve Bank of India (RBI) Act, 1934 was amended via the Finance Act, 2016, legally mandating the inflation targeting framework and establishing the MPC. The primary objective set for the MPC is to maintain inflation within a specified band while keeping in mind the objective of growth. This structure replaced the previous system where the RBI Governor solely determined the policy repo rate.
Similar Questions
- Which of the following does the work of linking all the ATMs in India?
- After amalgamation of 26 Regional Rural Banks (RRBs) in fourth phase of amalgamation, as notified by Department of Financial Services (DFS) in 2025, how many RRBs will be left in the country?
- Which of the following banks became State Bank of India after nationalisation in the year 1955 and has the largest number of branches in the world?
- How many major banks were nationalised by the government in 1969?
- Which of the following is NOT an instrument of the monetary policy of the Reserve Bank of India?
- Which one of the following is the largest commercial bank in India?
- Dear money refers to money that is hard to obtain due to:
'Indradhanush 2.0' is associated with:
The purchasing power of a currency relative to another at current exchange rates and prices is ________.
- Bank rate is the interest rate at which:
Important Questions from Money and Banking
Which one of the following is likely to be the most inflationary in its effects?
Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?
Consider the following statements :
The effect of devaluation of a currency is that it necessarily
1. improves the competitiveness of the domestic exports in the foreign markets
2. increase the foreign value of domestic currency
3. improves the trade balance
Which of the above statements is/are correct?
Indian Government Bond Yields are influenced by which of the following?
1. Actions of the United States Federal Reserve
2. Actions of the Reserve Bank of India
3. Inflation and short-term interest rates
Select the correct answer using the code given below.
With reference to “Urban Cooperative Banks" in India, consider the following statements :
1. They are supervised and regulated by local boards set up by the State Governments.
2. They can issue equity shares and preference shares.
3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966
Which of the statements given above is/are correct?
