The Reserve Bank Of India

Introduction History of RBI Objective of RBI Structure of RBI Functions of RBI Conclusion

Table of Contents

The origins of the Reserve Bank of India can be traced to 1926, when the Hilton-Young Commission – recommended the creation of a central bank for India to separate the control of currency and credit from the Government and to improve banking facilities throughout the country. The Reserve Bank of India Act of 1934 established the Reserve Bank and after that in in 1949 the Reserve Bank was nationalized and fully controlled by India

Introduction

The Preamble to the Reserve Bank of India Act, 1934, under which it was constituted, specifies its objective as “to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage”.

Objective of RBI

Central Board of Directors

GovernorDeputy Governor

Executive DirectorsPrincipal Chief General Manager

Chief General ManagerGeneral Manager

Deputy General ManagerAssistant General Manager

ManagerAssistant Manager

Support Staff

Structure of RBI

Subsidiaries of the RBI

Deposit Insurance and Credit Guarantee Corporation (DICGC)

National Housing Bank (NHB) Bharatiya Reserve Bank Note Mudran

Private Limited (BRBNMPL) National Bank for Agriculture and Rural

Development (NABARD)

Structure of RBI

Issue of Currency notes Banker to the government Banker to the Banks Bank’s Supervision Monetary Regulation and Management Exchange Management and Control

Functions of RBI

Performs all banking function for the central and the state government and also acts as their banker except that of Jammu and Kashmir.

Issue of Currency Notes

Banker to the government

To ensure adequate quantity of supplies of currency Issues new currency and destroys currency & coins

out of circulating It has to keep gold and foreign security against the

notes and coins issued

Maintains banking accounts of all scheduled

banks RBI also regulates the opening or installation

of ATM RBI regulates the opening of branches by

banks RBI also regulates trade of gold. It issues guidelines and directives for the

commercial banks.

Banker to the Banks

Maintaining price stability ensuring adequate

flow of credit in the economy RBI formulates, implements and monitors the

Monitory Policy. Instruments of regulating monitory Policy are

basically of two categories: Quantitative Measures Qualitative Measures

Monetary Regulation and Management

Quantitative Measures

Bank Rate(7.00%) Repo Rate(6.50%) Reverse Repo Rate(6.00%) Cash Reserve Ratio (CRR)(4.00%) Statutory Liquidity Ratio (SLR)(21.25%)

Qualitative Measures Direct Action Moral Persuasion Legislation Publicity

Monetary Regulation Instruments

Licensing of Banks Branch Licensing Policy Approval of Capital, reserves and liquid assets

of banks Inspection of banks Audit Control over amalgamation and liquidation

Banks Supervision

To facilitate external trade and payment and

promote orderly development and maintenance of foreign exchange market in India.

It acts as a custodian and Manages the Foreign Exchange Management Act, (FEMA) 1999.

RBI maintains the exchange rate of Rupee v/s foreign currencies like US Dollar, Euro, Pound and Japanese Yen.

Exchange Management and Control

Hence after knowing all the facts and figures

relating the Reserve Bank of India, it is plausible to conclude that RBI supports our nation’s economy in a vital manner. Its Policies and decisions, affect the value of the Indian currency and we can also state that it is the backbone of Indian Economy.

Conclusion

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