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Kerala PSC Indian Economy Book Study Materials Page 352Book's First Page
12.28 ndian onom Meanwhile, the government has infused three ratio (CRAR) of the scheduled commercial banks tranches of capital into the banks (infused funds (SCBs) was 13.9 per cent (it was 13.6 per cent go to the RRBs, too through the PSBs under by March 2017)—largely due to an improvement whom they fall) upto March 2015: among the PVBs (private sector banks). (i) Rs. 12,000 crore infused during 2012–13 in seven PSBs. stock of money (ii) Rs. 12,517 crore infused in 2013–14 in 8 In every economy it is necessary for the central PSBs. bank to know the stock (amount/level) of money (iii) In 2014–15, the PSBs were recapitalised available in the economy only then it can go with Rs. 6,990 crore. This capital infusion for suitable kind of credit and monetary policy. Saying simply, credit and monetary policy of an was based on some new criteria— asset economy is all about changing the level of the quality , efficiency and strength of the money flowing in the economic system. But it banks. can be done only when we know the real flow of (iv) During 2015–16, the government money. That’s why it is necessary to first assess the released Rs. 19,950 crore to 13 PSBs level of money flowing in the economy. (Economic Survey 2015–16). Following the recommendations of the Second (v) For the year 2016-17, the government Working Group on Money Supply (SWG) in 1977, has announced a sum of Rs. 25,000 crore RBI has been publishing four monetary aggregates for the purpose of recapitalising the PSBs (component of money), viz., M1, M2, M3 and M4 (Union Budget 2016–17). (are basically short terms for Money-1, Money-2, (vi) The Indradhanush scheme was launched Money-3 and Money-4) besides the Reserve (in 2015-16) by the Government under Money. These components used to contain money which the PSBs are to be infused with of differing liquidities: Rs. 70,000 crore by March 2019 to M1 = Currency & coins with people + Demand enable them meet the ‘global risk norms’ deposits of Banks (Current & Saving (i.e., Basel III norms). Accounts) + Other deposits of the RBI. (vii) The ongoing recapitalisation process M 2 = M1+ Demand deposits of the post offices of the PSBs got a big boost when the (i.e., saving schemes’ money). Government announced (February 2018) M = M1+ Time/Term deposits of the Banks 3 a hefty sum of Rs. 2.11 lakh crores for (i.e., the money lying in the Recurring it. Infused into the PSBs upto October Deposits & the fixed Deposits). 2019, a part of it (Rs. 1.35 lakh crores) M = M3+ total deposits of the post offices (both, 4 will be mobilised through Recapitalisation Demand and Term/Time Deposits). Bonds while rest of it (Rs. 76,000 crores) Now the RBI has started50 publishing a will be raised by the banks from market set of new monetary aggregates following the (disinvestment process) and budgetary recommendations of the Working Group on Money support. This process will help the banks Supply: Analytics and Methodology of Compilation in meeting their capital adequacy targets (Chairman, Dr. Y. V. Reddy) which submitted also. As per the latest Economic Survey 2017-18, 50. The working group was set up in December 1997 under the chairmanship of Y. V. Reddy (the then Deputy by September, the capital to risk-weighted asset Governor, RBI) which submitted its report in June 1998.