Communication is a key element in functioning of modern central banks, who are placing greater emphasis on transparency and accountability. The increasing preference for a collegial method of monetary policy decision making and thrust on financial stability have laid more emphasis on structured policies/strategies for communication in the realm of central banking.

The Reserve Bank’s communication policy follows the guiding principles of relevance, transparency, clarity, comprehensiveness and timeliness: it strives to continuously improve public understanding of developments in the multiple domains under its ambit.

The framework of central banking policy in India has evolved around its objectives specified under the Reserve Bank of India Act, 1934, viz. “to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage; and to operate a modern monetary policy framework to meet the challenge of an increasingly complex economy, where the primary objective is to maintain price stability while keeping in mind the objective of growth.”

Consistent with the above, the Reserve Bank’s macroeconomic and monetary policy has focussed on maintaining price stability, ensuring adequate flow of credit to sustain the growth momentum, and securing financial stability. The financial stability objective are enabled by the powers vested with it for regulation and supervision of the Indian financial system and its constituents, the money, debt and foreign exchange segments of the financial markets and the country’s payment and settlement system support. These are augmented by the critical functions relating to maintenance of foreign exchange reserves and the role as the lender of last resort. The Reserve Bank pursues its core function of issuance of bank notes and currency management as well as its agency functions such as management of public debt, banker to Government (Centre and States) and banker to the banking system, including regulation of bank reserves. As a full-service central bank, it also propels the development and consolidation of the country’s financial system and supports inclusive growth.

The Reserve Bank’s approach is to communicate its policy stance and its assessment of the evolving situation by providing rationale as well as supporting information and analysis to all stakeholders.

In its medium-term Vision Statement for 2019-22, termed as ‘Utkarsh 2022’, the Reserve Bank has set out for itself the following mutually reinforcing objectives: