What does it mean “I promise to pay” clause on the banknotes?
The promissory clause printed on the banknotes i.e., “I promise to pay the bearer the sum of Rupees …” followed by the RBI governor’s signature, denotes the obligation on the part of the issuer of the note towards the holder of the bank note. As per Section 26 of the Reserve Bank of India Act,…
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RBI tells banks to give choice to borrowers either to opt for fixed or floating interest rates basis at the time of resetting the loan
RBI on Thursday advised all the regulated entities (Res) like banks and NBFCs (REs) that at the time of sanction, they shall clearly communicate to the borrowers about the possible impact of change in the benchmark interest rate on the loan leading to changes in EMI and/or tenor or both. Successively, any increase in the…
Read article Soon, you will get loans in minutes; RBI announces Public Tech Platform for Frictionless Credit
Reserve Bank of India (RBI) has announced the development of a Public Tech Platform for Frictionless Credit. The Platform is being developed by the Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of RBI. The Platform would be rolled out as a pilot project on August 17, 2023, in a calibrated fashion, both in terms…
Read article The difference between devaluation and depreciation of a currency
(The article offers a detailed explanation of fixed and floating exchange rates/ Real Effective Exchange Rates (REER) and their effects on our Foreign Trade and Internal Economy on the devaluation or depreciation of the Rupee. The article also elucidates the advantages and disadvantages of devaluation or depreciation of a currency.) There are two kinds of…
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Do you know the meaning of Fiat money and Seigniorage?
The article explains the growing demand for US Dollars and how the US economy has benefitted from the Seigniorage The unlimited notes and coins issued under the minimum reserve system are called Fiat money. The cost of issuing fiat currencies is paltry compared to their face value. Since the fiat currencies are issued and underwritten…
Banks are required to maintain an additional CRR of 10% on NDTL growth, the Repo rate remains unchanged
The Monetary Policy Committee (MPC) met on the 8th, 9th, and 10th of August 2023decided unanimously to keep the policy repo rate at 6.50 percent, and other key policy rates also remain unchanged. Under Section 42(1) of the Reserve Bank of India Act, 1934, all Scheduled Banks are required to maintain with the Reserve Bank…
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