5. Measures of Money Stock Reserve Bank of India employs FOUR measures of money stock, namely M1, M2, M3, M4 M1 : The measure of money stock designed by M1 is usually described as the money supply. The components of money supply are currency with the public(i.e., notes n circulation, circulation of rupee coins and circulation of small coins) and deposits(demand deposits with banks and other deposits with the RBI). M2 : M2 is M1 + Post Office Savings Bank Deposits. M3 : M3 is M1 + Time Deposits with the banks. In other words, M3 is money supply plus fixed deposits with the banks. M3 is usually referred to as aggregate monetary resources. M4 : M4 is M3 plus the total Post Office Deposits.
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