BANKING AFFAIRS

Detailed explanation-1: -High powered money is the liability of the monetary authority of the country. This is also called the monetary base and is created by the RBI. High powered money includes currency (notes and coins), deposits with the government and reserves of commercial banks with RBI. So, to sum up, high powered money is. H = C + R.

Detailed explanation-2: -It includes the total supply of currency in circulation in addition to the stored portion of commercial bank reserves within the central bank. This is sometimes known as high-powered money (HPM) since it can be multiplied through the process of fractional reserve banking.

Detailed explanation-3: -High-powered money is the sum of commercial bank reserves and currency (notes and coins) held by the Public. High-powered money is the base for the expansion of Bank deposits and creation of money supply. A commercial bank’s reserves depend upon its deposits.

Detailed explanation-4: -The Reserve Bank of India (RBI) has issued a concept note on Central Bank Digital Currency (CBDC) on October 7, 2022.

Detailed explanation-5: -High powered money refers to the money produced by RBI and government of India. It can also be defined as the total liability of monetary authority of the country and RBI.