What are the advantages of RBI?

This concentration of notes issue function with the Reserve Bank has a number of advantages: (i) it brings uniformity in notes issue; (ii) it makes possible effective state supervision; (iii) it is easier to control and regulate credit in accordance with the requirements in the economy; and (iv) it keeps faith of the …

What is the disadvantage of RBI?

Under this system, a large amount of precious metal lies locked in the reserve and cannot be put to productive use. This results in wastage of their use.

What are the advantages of minimum reserve system?

The minimum reserve system has the following advantages: (i) The system is economical because the entire note issue need not be backed by metallic reserves. Only a minimum reserve is to be maintained. (ii) It renders elasticity to the monetary system.

Why does RBI follow minimum reserve?

Sole purpose of the Minimum Reserve System is to maintain the money supply in the economy without increasing the inflation and maintain the confidence of the general public in the currency.

Why is RBI minimum reserve system?

Minimum reserves refer to the reserves maintained by the RBI against the notes issued. The currency issued is the liability to RBI, as it has to pay the currency holder the amount promised on the currency note. Therefore RBI maintains certain reserve against this liability.

What is an advantage of monetary policy by rule?

For firms, monetary policy can also reduce the cost of investment. For that reason, lower interest rates can increase spending by both households and firms, boosting the economy. The Federal Reserve can adjust monetary policy more quickly than the president and Congress can adjust fiscal policy.

What are the advantages and disadvantages of Prompt Corrective measures of RBI?

As RBI is the banking regulator they can monitor banks and through various regulatory measures restore health of banks. Thus Prompt Corrective Measures will increase profitability of banks through reduction of NPA. There will be no such disadvantage except they will not be able to lend to big borrowers.

What are the advantages of working in RBI?

After serving RBI for nearly 16 months, i could list out few advantages of RBI: Home posting : I am from Mehsana and posted in Ahmedabad. Assistants are posted in home state only. Perks and allowances : Perks are really good in RBI and get even better after promotions. There are different types of allowances.

What is the proportional Reserve System of RBI?

This Act was amended in 1948 by replacing foreign securities in place of sterling securities. As a result, as per the proportional reserve system, the RBI had to maintain reserves equal to 40 \% in gold and foreign currencies.

What are the powers of RBI Manager in IAS?

RBI Manager has almost no such powers and a limited authority. IAS officers need to travel a lot for visiting different parts of their district. RBI Manager gets very few chances of travelling and mostly travels to cities like Delhi and Mumbai. There are no fixed working hours for an IAS officer.