CAIIB Elective Paper - VII : CENTRAL BANKING (Syllabus-Topics)

Module - A: Rationale and Functions of Central Bank 

1. Evolution and Functions of Central Banking : Evolutions of Theory and Practice of Central Banking, Development of Central Banks in Developed and Developing countries. 
2. Functions of a Central Bank : Banker to Government, Banker to Banks, Monetary policy Functions, Currency Issue and Management, Payment system function, Maintaining Internal and External values of currency, Regulation, Facilitation and supervision of Financial System, Promotional Functions to support growth and other National objectives, Development of Financial Markets, Institutions and communication policies. 
3. Contemporary Issues : Desirability, Autonomy and independence, Credibility, accountability and transparency of a Central Bank, conflict with fiscal policies. 

Module - B : Central banking in India 

1. Reserve Bank of India : Organisational evolution, Constitution and Governance, Major organizational and Functional Developments over time, Recent Developments, RBIAct. 
2. India Specific Issues : Banking Regulation Act, FEMA, Banking Ombudsman Scheme, Financial Sector reforms, other financial regulators and division of functions. Institutions set up by RBI; NABARD, IDBI, DFHI, IRBI, UTI. 
3. Glossary of Central Banking Terms. 

Module - C : Monetary Policy and Credit Policy 

1. Monetary Policy : Objectives, Reconciling dual objectives, The Taylor Rule, Indicators of Policy, instruments of policy (Bank Rate, OMO, CRR, SLR etc.), policy Transmission mechanism and channels, transparency of policies, Lags in policy. 
2. Credit Policy : Objectives, Theory and Practice, Instruments. 
3. An over view of Fiscal Policy : Importance of Budgets, Union Budget, State Budget, Finances of Union and State Governments, Finance Commission. 
4. Striking balance between inflation and growth through monetary and fiscal policies. 

Module - D : Supervision and Financial Stability 

1. Indian Financial System : Constituents of Indian Financial Markets and their Regulation. Evolution of Bank Regulation and supervision. 
2. Financial Stability : Financial Development Vs Financial stability, Risks to Financial stability, Early warning signals and remedial action, Liquidity Management, Regulation and supervision of Banks, Risk Management in Banks, The Basle Norms, Prudential Norms, Effect of liberalisation and Globalisation on Financial Stability, Linkage to International Financial Stability, International standards and codes. Role of Supervisor under Basel Norms.