pratiyogita darpan hindi Published this article page no 107 Exchange Rate Management through occasional RBI intervention to curb excessive volatility Generate Investors Confidence through ability to finance Indias Current Account Deficit and minimize the impact of just above Junk Category rating and net negative international investment position of 12.9% of GDP Help emerge as Regional Leader through increased ability to open currency swap lines for others (e.g. SAARC nations as done in 2012 through currency swap mechanism) Liquidity against domestic and global Economic Risks like High banking NPAs corporate bond market crisis due to IL&FS payment default or the Covid19 related uncertainties Cushion against monetary stimulus withdrawal for US Fed in near future avoiding external sector crisis with over 10% currency fluctuation as happened earlier Arguments against maintaining High Forex Reserves At above US$600 billion Forex reserves are higher than our external debt obligations and enough to cover more than 15 months of our projected 202122 imports Low returns on Forex reserves usually around 1% or less due to near zero interest rates in advanced economies Large infrastructure financing needs of India to meet development aspirations and utilize young demography. Risks of High opportunity and fiscal costs of sterilization of liquidity i.e. unused excessive cash despite development needs poverty and large youth population Shows lack of confidence from government on its economy resilience soundness of macroeconomic management and its measures to raise capital or exports. KEY CONCEPTS AND INFORMATION ON BANKING AND MONETARY POLICY NonPerforming Asset When a loan whose principal or interest payment is overdue for less than 90 days it comes under the purview of Special Mention Accounts (SMA). It is a loan or advance for which the principal or interest payment remains overdue for a period of 90 days. Banks are required to classify NPAs further into Substandard Doubtful and Loss assets. o Substandard assets Assets which have remained NPA for a period less than or equal to 12 months. o Doubtful assets Assets which have remained in the substandard category for a period of 12 months o Loss assets It is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted although there may be some salvage or recovery value pratiyogita darpan hindi buy.
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