Distinguish between M0 , M1 and M3 in Indian Context.

Distinguish between M0 , M1 and M3 in Indian Context. 

Ans. M0 is called Reserve Money. It includes the following: M0 = Currency in Circulation + Bankers’ Deposits with RBI + Other deposits with RBI. M1 is called Narrow Money. It includes the following. M1 = Currency with public + Demand deposits with the Banking system + Other deposits with RBI. M1 = Currency with the Public + Current Deposits with the Banking System + Demand Liabilities Portion of Savings Deposits with the Banking System + ‘Other’ Deposits with the RBI. M3 is called Broad Money. It includes the following. M3 = M2 + Term Deposits of residents with a contractual maturity of over one year with the Banking System + Call/Term borrowings from ‘Non-depository’ Financial Corporations by the Banking System. M2 = M1 + Time Liabilities Portion of Savings Deposits with the Banking System + Certificates of Deposit issued by Banks + Term Deposits of residents with a contractual maturity of up to and including one year with the Banking System (excluding CDs). M2 = Currency with the Public + Current Deposits with the Banking System + Savings Deposits with the Banking System + Certificates of Deposit issued by Banks + Term Deposits of residents with a contractual maturity up to and including one year with the Banking System (excluding CDs) + ‘Other’ Deposits with the RBI.