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Reserve Bank of India: Presented By: Shilendra Kumar MD - Tabish Raza

The Reserve Bank of India (RBI) was established in 1935 according to the provisions of the RBI Act of 1934. It was originally privately owned but was nationalized in 1949. RBI has its central office in Mumbai and 22 regional offices. As India's central bank, RBI formulates and implements monetary policy, regulates and supervises the financial system, manages foreign exchange and currency, acts as a bank for the government and other banks, and promotes financial institutions. All of RBI's functions, whether monetary, regulatory, or promotional, are significant for the Indian economy.

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Md Tabish Raza
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354 views12 pages

Reserve Bank of India: Presented By: Shilendra Kumar MD - Tabish Raza

The Reserve Bank of India (RBI) was established in 1935 according to the provisions of the RBI Act of 1934. It was originally privately owned but was nationalized in 1949. RBI has its central office in Mumbai and 22 regional offices. As India's central bank, RBI formulates and implements monetary policy, regulates and supervises the financial system, manages foreign exchange and currency, acts as a bank for the government and other banks, and promotes financial institutions. All of RBI's functions, whether monetary, regulatory, or promotional, are significant for the Indian economy.

Uploaded by

Md Tabish Raza
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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R.B.

I
Reserve Bank Of India

Presented by:
Shilendra Kumar
Md.Tabish Raza
Establishment
• Established on 1st April 1935 in accordance with the
provisions of the RBI Act 1934 on the basis of
recommendations of the Hilton Young Commission.
• RBI Central office was in Kolkata, until it was
moved to Mumbai in 1937. RBI has 22 regional
offices.
• Originally privately owned, but after
nationalization in 1949, RBI is fully owned by GOI.
RBI : Governing Body
• RBI’s affairs are governed by a Central
Board of Directors appointed by the GOI.
Central Board of Directors

Official Directors Non-Official Directors


- Full time directors - 10 directors
from
- Governor various fields
- 4 Deputy governors - 1 govt. official
- 4 directors from local boards
Main Functions
The Reserve Bank of India Act of 1934 entrust
all the important functions of a central bank to
the RBI.
Monitory Authority :
• RBI formulates, implements & supervises the
monitory policy of the country to maintain
price stability & ensure adequate flow of credit.
• RBI is the controller of credit i.e. it has the
power to influence the volume of credit created
by banks in India through various instruments.
Functions…
Regulator & Supervisor of the financial system :
• Provides broad parameters for banking
operations within which the country’s banking
& financial system functions.
• For supervising financial system, RBI formed
the Board of Financial Supervision (BFS) in
1994.
• BFS mainly supervises commercial banks, FIs
& NBFCs.
• BFS’s main concerns are…
– Restructuring the system of bank inspections.
– Strengthening the role of statutory auditors.
– Legal issues in bank frauds, etc.
Functions…
Managing Foreign Exchange :
• Manages the foreign exchange of the
country i.e. maintains the exchange rate of
Rupee against other currencies.
• RBI also acts as the custodian of India’s
reserve of international currencies.
• Aim is to facilitate external trade &
payments and promote orderly
development & maintenance of foreign
exchange market in India.
Functions…
Issuer of currency :
• Under section 22 of the RBI Act, the bank
has the sole right to issue bank notes of all
denominations.
• Issues & exchanges or destroys currency &
coins not fit for circulation.
• RBI has a separate Issue Dept. which is
entrusted with the issue of currency notes.
• Aims to give the public adequate supply of
currency notes & coins of good quality.
Functions…
Banker to government :
• Acts as a government banker, agent &
adviser for the central bank as well as for
all state govts. (except Jammu & Kashmir)
• RBI has to keep cash balances of the govt.
as deposits, receive and make payments on
behalf of the govt.
• It also provides loans and advances to state
govts and local authorities.
Functions…
Banker’s bank & lender of last resorts :
• All scheduled banks have to maintain cash
reserves i.e CRR equal to 3% of their
aggregate deposit liabilities.
• The schedule banks can borrow money
from RBI on the basis of the eligible
securities in times of need & urgency.
Functions…
Promotional functions :
• RBI has directly or indirectly set up
financial institutions like Deposit Insurance
Corporation, UTI, IDBI, Agricultural
Refinance Corporation of India, Co-
operative credit movements, etc.
• This was with a view of promoting saving
habits, eliminating money lenders,
mobilizing savings, providing industrial &
agricultural loans.
Conclusion
• All the functions of RBI, monitory, non
monitory, supervisory or promotional are
equally significant in context of the Indian
economy.
• Under the Banking Regulation Act, RBI has
been given a wide range of powers.
• Under the supervision & inspection of RBI,
the working of banks has greatly improved.
• RBI has been responsible for strong
financial support to industrial &
agricultural development in the country.
THANK YOU

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