CONTEMPORARY ISSUES

Introduction:
Contemporary issues refers to an issues
that is currently affecting people’s and places.
It’s important to central bank to
maintain economic growth with price
stability.
Central bank quite successful in
ensuring financial stability through of such
issues.
There are five important contemporary
issues of central bank following are:-
1. Autonomy Of central Bank.
a)Factors limiting autonomy
b) Autonomy of RBI
2. Independence Of Central Bank
3. Credibility
4. Accountability
5. Transparency
 Explanation in Brief.
1)Autonomy of central bank:-
 The world autonomy research complete independent or separation from others.
The world autonomy and independent often is synonymous of banking sector.
 Both government and Central bank have to co-ordinate and co-operate with
each other to achieve their goals.
 After 1st and 2nd world war increased autonomy concept
 Development of economy depend of two policies
 i) Fiscal policy:- which is control by government
 ii) Monetary policy:- which is control by central bank (RBI)
 Today central bank are actively involved in developing financial market,
Management of public debt and Foreign exchange etc.
A) Factors Limiting Autonomy:-
a) Conflicting of Monetary policy and Fiscal Policy.
b) The public sector banks owned by government.
c) The budgetary operation of government influence Autonomy of central
bank.
d) Public debt used by government to financial project.
e) Appointment of Top Official by central government.
f) In the recent times India issues demonetisation which increases non
performing assets of banking sector.

B) Autonomy of RBI:-
a) India introduction of LPG in 1991.
b)After the recommendation of Nursimum committee in India the central bank
increase their autonomy.
c) Introduction of convertibility of rupee in current account.
d) Withdrawal of monetization of budgetary.
e) Short term and long term liquidity adjustment.

2) INDEPENDENCE OF CENTRAL BANK

An independent central bank would be more professional in working and able

to discharge their functions effectively.
The independence of RBI become issues due to following:-
1) Top official are appointed by th government.
2) The RBI is the bankers to the government.
3) Public debt Manage by RBI.
3) CREDIBILITY
1)The credibility of central bank depend upon their objectives and
organisational management.
2) Central bank have a multiple tasking.
3) The central banks fulfill their targets it’s depend upon their credibility.
4) The credibility of central bank lies in using it’s instruments and
achieving the targets.
5) The central bank make clear stand like public debt management,
subsidised credit, populist policies of government like loan waivers etc.
6) Advise government accordingly to enhance the credibility of
central bank.
4) ACCOUNTABILITY
1) Central bank are empowered to make all account of government
become easier.
2) If banks are given clear mandate and operational freedom they can
made accountable for outcome.
3) Central banks have to perform diverse functions like financial sector
reform, fiscal policy reform, reform of Forex market and labour market etc.
4) All transaction of government and subordinate banks inhance
accountability.
5) Accountability ensure optimum use of resources and better governance
and control.
5)TRANSPERANCY
Transparency is an important part of central banking.
The emerge of World trade organisation (WTO) and liberalisation results
Increase in international trade and transaction.
The central bank expected to be more transparent to their policies and
outcome
Transparency is given a lot of important by many central banks in post
Liberalisation era.

The following methods are adopted to impart transparency:-

1) Publication of annual report.
2) Report on inflation targeting and and outcome.
3) Use print media and electronic media for dissemination of
information.
4) Open discussion through seminar and conferences involving all the
stakeholders.
Thank you