Central Bank of Indus
The CBI is the Government body that performs the functions of acting as the Governments
bank, maintaining the gold reserves for the nation and managing all other commercial
banks in the Country
Main Aims for the Central Bank of Indus
•Sustain monetary Policies with changes, as and when needed
•Maintain proper for-ex reserves
•Payments for deficit Fianancing (interest)
•Orgainisational Budgeting
•Promotion of government Securities
•Creating an environment suited for Commercial banks
Tentative Budget:
7.4% of the Indus Budget i.e 1,08,780 Crore
Budget Break up:
Organisational Expenses – 6.9%
For-ex/ gold Reserves – 27%
Monetary Policy Management -43%
Interest payments – 14%
Securities Promotion – 6%
Managing Commercial banks – 2%
Miscallaneous Buffer – 1.1%
The CBI would like such a high Budget for Monetary Policy Management as the inflation/
money supply is in control as of now and we most likely will have to pay financial
institutions for parking their money in our schemes.
Also gold and for-ex reserves need to be increased to have a stronger Currency.
Overview
Monetary policy in 2014-15 had to continue to address the risk to growth while guarding
against the risks of inflation pressures re-emerging and adversely impacting inflation
expectations. With the liquidity deficit remaining above the comfort level for most of the
year due to a mix of structural and frictional factors, the Central Bank had to undertake
active liquidity management to inject durable primary liquidity through OMOs, and
reduction in the CRR and the SLR to ensure adequate credit flow to productive sectors of
the economy. After a frontloaded reduction in the policy rate at the beginning of the year
and active liquidity management during the year, with the ebb in inflation, the Central
Bank reduced policy rate further since January 2014 in a calibrated manner taking into
account the evolving growth-inflation dynamics. During 2014-15, the Central Bank eased
monetary policy further in early May, but undertook liquidity tightening measures
subsequently to address macro-financial risks from exchange rate volatility
•Central Bank rationalised import of gold by making it incumbent on all nominated
banks/entities to ensure that at least one fifth of imported gold is exclusively made
available for the purpose of exports
Financial inclusion is a flagship programme of the Central Bank. Its objective is to bring
people, hitherto excluded, under the ambit of formal financial institutions. To push towards
universal financial inclusion, the Central Bank has taken several initiatives. These include
