Is time deposit included in money supply ?
Pls explain the answer

Dear Student 
Yes, time deposits are included in money supply.
The RBI uses four measure of money supply denoted as M 1 , M 2 , M 3 , M 4 .
M 1 = Currency notes and coins in circulation with public (but not those held by banks) + Net demand deposits with the commercial banks + Other deposits
M 2  = M 1  + postal saving bank deposits
M 3  = M 1  + net time deposit with commercial bank
M 4  = M 1  + postal saving bank deposits + fixed deposit with bank
In India, net time deposits of commercial banks and co-operative banks are included in M3 measurement of money supply which makes it a little rigid then the M1 measurement in terms of liquidity.


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