On 3rd May 2011, the Reserve Bank in its Annual  BIS central bankers’ speeches  5  Monetary Policy Statement announced a revised monetary policy operating procedure based on the recommendations of a Committee constituted for the purpose.5 Before I delve into the current operating procedure, let me give you a snapshot of the evolution of our monetary policy operations since the inception of the Reserve Bank of India in 1935.
First, in the formative years during 1935–1950, the focus of monetary policy was to regulate the supply of and demand for credit in the economy through the Bank Rate, reserve requirements and OMO. Second, during the development phase during 1951–1970, the need to support plan financing through accommodation of government deficit financing by the RBI began to significantly influence the conduct of monetary policy.