Presented by:Vaishnav Kumar

Agenda Preamble Brief history Governors The key role of the RBI Monetary authority Regulator and supervisor of the financial system Manager of foreign exchange Issuer of currency Developmental role Instruments of credit control Objective and reasons for establishment of RBI Subsidiaries

Central Bank

“It is a bank of banker” -- Samuelson

“Bank which has monopoly over note issue” -- Vera Smith

“Central bank is the government’s bank” -- Sayers

Structure of Banking in India

Reserve Bank

Commercial Bank Co-operative Bank

-Public Sector Bank -State Co-op bank

-Private Sector bank -Central Co-op Bank

-Regional Rural Bank -Primary Co-op Soc

Organizational StructureGovernor

Deputy Governor

Executive Directors

Principal Chief General Manager

Chief General Managers

General Managers

Deputy General Managers

Asstt. General Managers

Managers

Asstt Managers

Support staff

PREAMBLE

The preamble of the Reserve Bank of India describe the basic functions of the Reserve Bank as

“…to regulate the issue of Bank Notes and keeping of reserve with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage”

BRIEF HISTORY (1 OF 2)

It was set up on the recommendations of the HILTON YOUNG COMMISSION

It was started as Share-Holders Bank with a paid up capital of 5 Crs It was established on 1st of April 1935 Initially it was located in Kolkata It moved to Mumbai in the year 1937 Initially it was privately owned It was the 1st bank to be Nationalized in 1949 It has 22 regional offices, most of them in state capitals

Since nationalization in 1949, the Reserve Bank is fully owned by the Government of India

Its First governor was Sir Osborne A.Smith(1st April 1935 to 30th June 1937)

The First Indian Governor was “Sir Chintaman D.Deshmukh”(11th August 1943 to 30th June 1949)

On 27th June 2006, the Union Government of India reconstituted the Central Board of Directors of the Reserve Bank of India(RBI) with 13 Members, including Azim Premji and Kumar Mangalam Birla

BRIEF HISTORY (2 OF 2)

GOVERNORS (1 of 2)

Sir Osborne A. SmithApril 1, 1935 to June 30, 1937

Sir James Braid Taylor July 1, 1937 to February 17,1943

Sir Chintaman D.Deshmukh August 11, 1943 to June 30, 1949

Dr. Bimal Jalan

November 22, 1997 to September 5, 2003

Dr.Y.V.Reddy  September 6, 2003 to September 5, 2008

Dr. D. Subbarao  September 5, 2008 onwards

GOVERNORS (2 of 2)

THE KEY ROLES OF THE RBI ARE…

Regulator and supervisor of the financial system

Manager of Exchange control

Issuer of currency

Banker to the Government

Bank to banks: maintains banking accounts of the scheduled banks

Monetary Authority Formulates, implements and monitors the monetary policy Objective: maintaining price stability and ensuring adequate flow of

credit to productive sectors

Regulator and supervisor of the financial system: Prescribes broad parameters of banking operations within which the

country's banking and financial system functions Objective: maintain public confidence in the system, protect depositors

interest and provide cost-effective banking services to the public

Manager of Foreign Exchange Manages the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly

development and maintenance of foreign exchange market in India

Issuer of Currency Issues and exchanges or destroys currency and coins not fit for

circulation Objective: to give the public adequate quantity of supplies of

currency notes and coins and in good quality

Developmental Role Performs a wide range of promotional functions to support national

objectives

Related Functions Banker to the Government: performs merchant banking function

for the central and the state governments; also acts as their banker Banker to banks: maintains banking accounts of all scheduled

banks

INSTRUMENTS OF CREDIT CONTROL

Quantitative or General Methods

Qualitative or Selective Methods

Quantitative Qualitative Bank Rate Selective Credit Control Open Market Rationing of Credit Operation(OMO) Moral Persuasion Change in Cash Direct Action  Reserve Ratio (CRR) Statutory Liquidity Ratio(SLR) Repo and Reverse Repo Ratio

The main objectives for establishment of RBI as the central bank of India were as follows :

To manage the Monetary and credit system of the country To stabilize internal and external value of rupee For balanced and systematic development of banking in the

country For the development of organized money market in the country For proper arrangement of agriculture finance For proper arrangement of industrial finance For proper management of public debt To establish monetary relations with other countries of the world

and international financial institutions For centralization of cash reserves of commercial banks To maintain balance between demand and supply of currency

OBJECTIVE AND REASONS FOR ESTABLISHMENT OF RBI

Fully owned National Housing bank (NHB) Deposit Insurance and Credit Guarantee Corporation of India (DICGC) Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)

Major stakes National Bank For Agriculture and Rural Development (N ABARD) The reserve Bank of India has recently divested stake in State Bank of

India to the government of India 

SUBSIDIARIES..!

RBI also regulates the opening / installation of ATM RBI regulates the opening of branches by banks It ensures that all the N.B.F.C follow the KYC Guidelines Fresh currency notes for ATM are supplied by RBI Banker to the Government: Performs all banking function for the

central and state governments and also act as their banker The reserve bank of India also regulates the trade of gold. Currently

17 banks are involved in the trade of gold in India RBI has invited applications from more banks for direct import of gold to curb illegal trade in gold and increase competition in the market

It issues guidelines and directions for the commercial banks

Related Functions

Conclusion Central bank plays important role in achieving economic growth of

a developing country It promotes economic growth with stability It helps in attaining full employment balance of payment

disequilibrium and in stabilizing exchange rate RBI is an autonomous body promoted by the government of India

and is headquartered at Mumbai RBI is an autonomous body promoted by the government of India

and is headquartered at Mumbai treasury foreign exchange movements and is also the primary regulator for banking and non-banking financial institutions

The RBI operates a number of government mints that produce currency and coins

RBI Websites RBI Bulletin………………………………..www.bulletin.rbi.org.in RBI Annual Report……………………...….www.annualreport.rbi.org.in Weekly Statistical Supplement……………...www.wss.rbi.org.in Monetary and Credit Policy………………….www.cpolicy.rbi.org.in RBI Notifications…………………………….www.notifics.rbi.org.in RBI Press Release…………………………….www.pr.rbi.org.in RBI Speeches…………………………………www.speeches.rbi.org.in Monetary and credit Information Review……www.mcir.rbi.org.in Report on Trend and Progress of Banking…..www.bankreport.rbi.org.in

www.rbi.org.in

www.financialexpress.com

Sources

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