In 2023-24, M1 was Rs 60,91,700 crore and M3 (aggregate monetary resources) was Rs 2,49,39,860 crore. About what share of M3 was made up of time deposits held by commercial banks?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → About 76 per cent
Given:
M1 = Rs 60,91,700 crore
M3 = Rs 2,49,39,860 crore
M3 = M1 + net time deposits of commercial banks, so time deposits = M3 − M1.
Time deposits = 2,49,39,860 − 60,91,700 = 1,88,48,160
Share in M3 = 1,88,48,160 ÷ 2,49,39,860 ≈ 0.76 = about 76 per cent
About 24 per cent is the share of M1 in M3, not of time deposits.
NCERT (2026-27): “Legal Definitions: Narrow and Broad Money Money supply, like money demand, is a stock variable. The total stock of money in circulation among the public at a particular point of time is called money supply. RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4. They are defined as follows “Table 3.4: Changes in M1 and M3 Over Time (in crore) (2023-24) … The difference in values between the two columns is attributable to the time deposits held by commercial banks.” |