30 May 2024 PRAVAAH Portal

THIS ARTICLE COVERS ‘DAILY CURRENT AFFAIRS’ AND THE TOPIC DETAILS OF ”PRAVAAH Portal.”. THIS TOPIC IS RELEVANT IN THE “Economy” SECTION OF THE UPSC CSE EXAM.  

Why in the News?

The Reserve Bank of India has introduced three significant initiatives: the PRAVAAH portal, the Retail Direct Mobile App, and a FinTech Repository. These efforts are designed to improve the public’s access to the central bank and streamline regulatory approvals and transactions. 

What is the PRAVAAH Portal:   

• The Platform for Regulatory Application, Validation, and Authorisation (PRAVAAH) is a centralised and secure online portal designed for individuals and entities to obtain licenses, authorisations, or regulatory approvals for any inquiries made to the RBI. The key features available in the portal are including:
  • Apply the application online on the portal.
  • Monitor and keep track of the application/reference status. 
  • Address any clarification or query the RBI raises regarding the application or reference.
  • Obtain a decision from the RBI within a specified timeframe. 
• This portal will also enhance the efficiency of various processes related to the RBI’s granting of regulatory approvals and clearances.  
• An individual or organisation can submit up to 60 application forms online, addressing various regulatory and supervisory departments within the RBI. 

About Reserve Bank of India: 

• The country’s central banking institution is the Reserve Bank of India (RBI). It controls the issuance and supply of the Indian rupee and manages the country’s main payment systems. 
• The RBI was established on April 1, 1935, under the Reserve Bank of India Act of 1934. It was nationalised in 1949 and is now fully owned by the government. 
• The Reserve Bank of India operates under the direction of a central board of directors, with appointments made by the Government of India. The current Governor, Shaktikanta Das (as of the last update in 2023), leads the board. 

Key Functions of the RBI are:

1. Monetary Authority: The RBI formulates and implements monetary policy to stabilise prices and achieve economic growth.
2. Issuer of Currency: It is responsible for issuing and managing currency in India.
3. Regulator of Financial System: The RBI regulates and supervises the financial system, including commercial banks and non-banking financial companies, to ensure stability and soundness.
4. Manager of Foreign Exchange: It manages the Foreign Exchange Management Act, 1999 (FEMA) and facilitates external trade and payment.
5. Development Role: The RBI performs various promotional functions to support national objectives, including developing the agricultural and rural sectors. 

Major Policies of RBI include: 

• Monetary Policy Committee (MPC): This committee sets benchmark interest rates to control inflation and foster economic growth.
• Liquidity Adjustment Facility (LAF): Through LAF, the RBI manages liquidity and short-term interest rates via repo and reverse repo operations.
• Statutory Liquidity Ratio (SLR): The percentage of a bank’s net demand and time liabilities must be maintained as liquid assets.
• Cash Reserve Ratio (CRR): The percentage of a bank’s total deposits that must be held in reserve with the RBI.

The RBI plays a crucial role in shaping India’s economic landscape through its diverse functions and policies, striving to balance economic growth and financial stability.

Download Yojna daily current affairs eng med 30th May 2024

MAINS PRACTICE QUESTION: 

Q. Discuss the RBI’s contribution to the development of the financial markets in India. How does the RBI control inflation in the economy?

Amit Pradhan

I have the experience to guide and write the content for the  UPSC, and PCS Aspirants in preparing for the Civil Service Exam.  Currently Working as a content developer in Yojna IAS.