Monetary Policy of India During Recession

6337 Words26 Pages
| |2009 |
| |University of Economics- Wroclaw |
| | |
| |Satish Kumar M.K Masters in Finance |
| |Yr-1 |

|Monetary Policy Project |
|India’s Monetary Policy during recession, Currency Management by Reserve Bank of India and the summary of Monetary policy frameworks of |
|various central banks. |
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Developmental role: • Performs a wide range of promotional functions to support national objectives.
Related Functions:
Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker. • Banker to banks: maintains banking accounts of all scheduled banks.
With this brief introduction, I would like to address on two areas of concern of which India is facing today and Reserve Bank of India responses to tackle the same. 1) How and why was India Impacted by the Global Financial Crisis? How did monetary policy of India respond to the crisis? 2) Economic Offence/Crimes, surge of counterfeits notes and the steps taken by reserve bank of India in the area of currency Management?
How was India impacted by the global financial crisis?

The subprime crisis that emerged in the US housing mortgage market in 2007 Snow balled into a global financial crisis, and a global economic recession followed. The Financial landscape has changed significantly after the collapse of Lehman Brothers in September 2008. An important lesson, post-September 2008, is that irrespective of the degree of globalization of a country and the soundness of its domestic policies, a financial crisis could spread to every economy.

The direct effect of the global financial crisis on the Indian banking and financial system was almost negligible, thanks to the limited exposure to riskier assets and derivatives.
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