“Considering this as an achievement, we believe that the role of RBI has expanded significantly beyond the initial goals,” he said at the closing ceremony of the RBI’s 90th anniversary on Tuesday.
Before the monetary policy review meeting, the Reserve Bank of India announced to provide Rs 80 thousand crore to the banking system through open market operations. According to RBI, this initiative will improve the proper condition of cash in the banking system. Announcing OMO, it said that the Reserve Bank will keep an eye on the increasing cash and changing market conditions to assess the proper conditions.
This move of RBI is being seen as ensuring the benefit of reduction in policy interest rates for banks. Economic experts believe that the main objective of the Reserve Bank is to maintain adequate surplus cash in the banking system, and the purchase of OMO is an indication of this plan.
RBI’s focus on liquidity
According to a Business Standard report, IDFC First Bank’s Chief Economist Gaura Sen Gupta says that past situations show that change happens only when the liquidity is between Rs 1 lakh crore and Rs 2 lakh crore, despite this belief, RBI can slow down these activities due to its dividend.
She further said that RBI’s steps show that it is committed to ensuring adequate liquidity for change.
Meanwhile, RBI Governor Sanjay Malhotra mentioned the central bank’s commitment to strengthen consumer protection as well as making the regulatory framework flexible to strike a balance between financial stability and efficiency.
RBI Governor said – Next decade is important
At the closing ceremony of RBI’s 90th anniversary on Tuesday, he said, “Considering this as an achievement, we believe that the role of RBI has expanded significantly beyond the initial goals.” He said, “Today we stand at the juncture of tradition and change…where the imperatives of price stability, financial stability and economic growth are combined with rapidly growing technology, global uncertainties, challenges of climate change and rising public expectations.” The governor said that the next decade will prove to be important in shaping the financial structure of the Indian economy. RBI is committed to increasing financial inclusion. He said, “We will try to promote a culture of continuous improvement in customer services and strengthening consumer protection. Our effort will be to make our regulatory framework flexible by balancing the interests of financial stability and efficiency. We will continue to support technology and innovation. We will remain vigilant, flexible and visionary.”
