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2.2 Monetary Policy - Coggle Diagram

- - - - RRB, SFB, UCB = 75%, Rural Cooperative = NA
    - - Agri, Small & Marginal Farmer, Micro Enterprise, General
    - - Weaker Section(SC/ST/Women/Rural/PMJAY etc)(10->12%), Agriculture(10->8%), Agriculture(small farmer(8->10%)), Micro Enterprise(same 7.5%) + Extra(student, infrastructure, exporters etc)(4.5%->2.5%)
        
        Bank Loan -> NBFC -> these PSL will also counted for bank's quota
- - - - RBI Act, 1934 - Bank deposit on RBI w/o Interest; No min/max limit; current = 4.5% of NDTL;
    - - BRA, 1949 - must keep deposits with themselves in liquid assets (cash/gold/G-Sec/T-Bills/State Development Bonds etc. approved by RBI); <=40%, current=18% of NDTL
        
        Protect from bank run
  - - - Marginal Standing Facility rate(MSF) = BR+X(=0 from 2012) = 6.75%(2023)
        
        Only Banks - short term(<=14D) borrows from RBI against SLR
  - - - by All clients of RBI i.e. bank, non-bank, Union & State Govt - short term(<=14D) borrows from RBI against GSec/TBill(mostly non-SLR)
        
        clients repurchase their GSec/Tbill at higher price
    - - by Commercial Banks - short tem(<=14D) surplus fund to RBI to earn interest against RBI's GSec
        
        RBI repurchase their GSec/Tbill at higher price
    - - same as reverse repo but without collateral from RBI
  - - - Lender(Banks/NBFCs etc.) other than RBI
    - - borrower, lender, agent(NSE/BSE) - corporate to borrow from market
    - - RBI buys/sells union/state G-Sec/T-bill to inject/suck liquidity
        
        RBI doing OMO to make exchange rate stable called Sterilization
    - - RBI buys G-Sec from 2* Market
    - - RBI sells specific type G-Sec/T-bill/Cash Management Bills to suck liquidity
    - - long term repo for 1-3Y at current repo rate(fixed)
    - - long term repo for 1-3Y at floating repo rate
    - - RBI buying/selling G-Sec of various maturity such that money supply same but Bond Yield varies
        
        in 2019 RBI did special OMO to dec long term GSec yield to make corporate bond attractive
    - - Bond sells at fixed price at maturity; high bond demand in Recession -> less bond yield
- - - - Bank Lending Rate depends upon External Benchmark + Spread + Risk premium