COMMUNICATION POLICY OF RBI Flashcards
Reserve Bank’s macroeconomic and monetary policy has focussed on
maintaining price stability, ensuring adequate flow of credit to sustain the growth momentum, and securing financial stability.
The financial stability objective are enabled by
the powers vested with it for regulation and supervision of the Indian financial system and its constituents, the money, debt and foreign exchange segments of the financial markets and the country’s payment and settlement system support.
In its medium-term Vision Statement for 2019-22, termed as ‘Utkarsh 2022’, the Reserve Bank has set out for itself the following mutually reinforcing objectives:
excellence in performance of statutory and other functions;
strengthened trust of citizens and other institutions in the RBI;
enhanced relevance and significance in national and global roles;
transparent, accountable and ethics-driven internal governance;
best-in-class and environment friendly digital as well as physical infrastructure; and
innovative, dynamic and skilled human resources.
The communication policy of the Reserve Bank has the following principal goals
providing clarity on its role and responsibilities;
building confidence in its policy measures;
improving transparency and accountability;
anchoring expectations of all economic agents to enhance the efficacy of monetary policy and to minimise undue speculation;
increasing awareness about financial stability;
dissemination of information with minimum time lag;
ensuring timeliness and credibility through effective communication; and
deepening engagement with the multi-lingual and multi-cultural society
The above broad goals of communication policy are pursued through the following guiding principles:
elucidation of the policy stance with rationale, information and analysis;
coherence and credibility in articulation through structured and periodic statements, speeches of the top management, statutory and other regular publications, research publication, committee reports as well as dissemination of regular information on important developments;
disseminate customised communication depending on the target audience (e.g., regulated entities, researchers, analysts, academics, rating agencies, media, other central banks, multilateral institutions, market participants, Government agencies and the members of public including women, senior citizens, defence personnel and school children in both urban and rural areas) through public awareness initiatives and microsite on the RBI website in eleven major regional languages apart from Hindi and English;
dissemination of market related information on near real time basis through the website;
dissemination of important information emanating from the Reserve Bank through social media; and
Pre-announcement of the dates of future structured communication through advance release calendars to bring predictability.
The Communication Aspects of the Reserve Bank includes strategies on
Monetary Policy communication;
Financial Stability communication;
Communication relating to other functional domains;
Communication during times of crisis;
Dissemination through flagship publications; and
RBI staff as ambassadors of RBI.
inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every
five years
The Reserve Bank of India Act, 1934 was amended in ___________- to provide statutory basis for a monetary policy framework, the MPC and the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.
2016
The monetary policy framework aims at
(a) setting the policy (repo) rate based on an assessment of the current and evolving macroeconomic situation and, (b) modulation of liquidity conditions on a day-to-day basis through appropriate actions to anchor money market rates. The operating framework responds to the evolving monetary and financial market conditions, consistent with the monetary policy stance. The Reserve Bank also holds pre-policy consultations with economists, bankers, industry groups and other stakeholders to ascertain their views on aggregate / sector-specific assessments and their policy expectations.
The Reserve Bank’s communication on financial stability has the following broad dimensions:
publication of the statutory annual report on ‘Trend and Progress of Banking in India’ and half-yearly ‘Financial Stability Report’, to provide an assessment of performance of the Indian banking system as well as the soundness, risks and resilience of the Indian financial system, supplemented by press releases on important developments in the financial sector;
organising informal press briefings and media workshops, at both central and regional office levels, to explain the supervisory and regulatory aspects pertaining to the financial sector and to help explaining macro-prudential policy actions to stakeholders; and
making communication an integral part of financial stability framework to highlight the underlying messages, beyond data and measures, to the broader audience and developing communication capacity by keeping all stakeholders apprised of the developments in the financial sector.
only spokespersons on issues relating to monetary and exchange rate policy;
Governor and the Deputy Governor in charge of monetary policy
Deputy Governors are the spokespersons in their respective areas of responsibility;
general spokesperson of the Reserve Bank;
head of the Department of Communication (DoC)
speak on local grievance redressal issues
Ombudsmen
_____________ clarify local issues
Regional Directors
Bank’s Communication Policy will be reviewed every
three years
