December 18 and analysts/ experts / economists all keeping an eye on RBI, s they say The Reserve Bank is likely to keep policy rates unchanged in its monetary policy review next week, although inflation for the second the second consecutive month in November has declined.

Over the past three months, the Reserve Bank has reduced the cash reserve ratio, the portion of deposits banks are required to keep with RBI, by 0.50 per cent to 8 per cent. But these cuts did not lead to an easing of overnight rates. The RBI is scheduled to announce its mid-quarter monetary policy review on December 18

In the mean time just thought of sharing some basics from RBI : -

Narrow Money (M1) This is a fortnightly compilation. It consists of:

  1. Currency notes and coins with the public (Excluding cash on hand of all banks).
  2. Demand deposits (excluding inter-bank deposits) of all commercial and co-operative banks.
  3. ‘Other deposits’ held with the Reserve Bank of India (excluding balances in Account No. 1 of the International Monetary Fund, the Reserve Bank of India Employees’ pension, Provident and Guarantee Funds and ad hoc liability items which arise from time to time)

M2 

It consists of:

  1. M1
  2. Savings deposits with Post Office Savings Banks.

M3 It consists of:

  1. M1
  2. Time deposits of all commercial and co-operative banks (excluding inter bank time deposits)

M4 It consists of:

  1. M3
  2. Total deposits with the Post Office Savings Organization (excluding National Savings Certificates).

L1 This is a Monthly Compilation. It consists of:
M3 + All Deposits with the Post Office Savings Banks (Excluding National Savings Certificate).

   L2 This is a Monthly Compilation. It consists of:
L1 + Term Deposits with Term Lending Institutions and Refinancing Institutions (FIs) + Term borrowing by FIs + Certificates of Deposit issued by FIs

 L3 This is a Quarterly Compilation. It consists of:
L2 + Public Deposits of Non-Banking Financial Companies.