Test tenders SIT U31

In May 2016, the RBI Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.

Inflation Target: Under Section 45ZA, the Central Government, in consultation with the RBI, determines the inflation target in terms of the Consumer Price Index (CPI), once in five years and notifies it in the Official Gazette. Accordingly, on August 5, 2016, the Central Government notified in the Official Gazette 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent. On March 31, 2021, the Central Government retained the inflation target and the tolerance band for the next 5-year period – April 1, 2021 to March 31, 2026.

Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) to determine the policy rate required to achieve the inflation target.

The data on Aggregate Deposits and Gross Bank Credit of Scheduled Commercial Banks as on last Friday of December 1997 collected through the BSR-7 returns have now become available. The top hundred centres arranged according to size of deposits accounted for 59.5 per cent of the total deposits. Similarly, the top hundred centres arranged according to size of bank credit constituted 72.2 per cent of total bank credit.

Nationalised banks as a group contributed 54.6 per cent of the aggregate deposits while the State Bank of India and its Associates accounted for another 25.3 per cent. The shares of other bank groups were 7.3 per cent for Foreign Banks, 9.4 per cent for Other Scheduled Commercial Banks and 3.5 per cent for Regional Rural Banks. As regards Gross Bank Credit, Nationalised Banks accounted for a share of 47.7 per cent of the total Bank Credit, while State Bank of India and its Associates claimed a share of 29.9 per cent. Other Scheduled Commercial Banks,Foreign Banks and Regional Rural Banks followed with shares of 9.9 per cent, 9.4 per cent and 3.1 per cent, respectively.

Among the States, the growth rate of deposits was highest in Orissa (26.7 per cent), followed by Delhi ( 26.2 per cent), Tripura & Meghalaya (24.3 per cent each) and Jammu & Kashmir ( 22.4 per cent).The growth rate of Bank Credit was highest in Delhi ( 31.3 per cent), followed by Arunachal Pradesh ( 26.5 per cent), Sikkim ( 24.5 per cent),Rajasthan ( 20.1 per cent) and Meghalaya ( 18.6 per cent). Six states namely Maharashtra, Delhi, Uttar Pradesh, West Bengal, Tamil Nadu and Gujarat together accounted for a total share of 60.7 per cent in Aggregate Deposits. Similary, the six states namely Maharashtra, Delhi,Tamil Nadu, Andhra Pradesh, Karnataka and West Bengal together accounted for a total share of 69.1 per cent in Gross Bank Credit. Maharashtra alone contributed 20.3 per cent of total deposits and 25.2 per cent of total credit.