ABSTRACT
In India, the Reserve Bank of India (RBI) Act sets out the central bank’s objectives as being ‘to regulate the issue of the bank notes and the keeping of reserves with a view to securing monetary stability and generally to operate the currency and credit system of the country to its advantage’. These objectives have generally been interpreted as price stability and economic growth, and they have remained unchanged since the enactment of this Act in 1934, though their relative emphasis has changed depending on the prevailing circumstances (Reddy, 2005: 222). In contrast, monetary policy procedures in India have undergone significant changes which reflect financial sector reform begun in the early 1990s.
