Development Role of Rbi

Topics: Bank, Central bank, Debt Pages: 4 (1190 words) Published: August 23, 2011
This role is, perhaps, the most unheralded aspect of our activities, yet it remains among the most critical. The Reserve Bank is one of the few central banks that has taken an active and direct role in supporting developmental activities in their country. The Reserve Bank’s developmental role includes -ensuring credit to productive sectors of the economy, -creating institutions to build financial infrastructure, -expanding access to affordable financial services, and - promoting financial education and literacy. Over the years, its developmental role has extended to institution building for facilitating the availability of diversified financial services within the country. The Reserve Bank today also plays an active role in encouraging efficient customer service throughout the banking industry, as well as extension of banking service to all, through the thrust on financial inclusion. Rural Credit

Given the predominantly agrarian character of the Indian economy, the Reserve Bank’s role has been to ensure timely and adequate credit to the agricultural sector and other economic activities in rural area at affordable cost. Section 54 of the RBI Act, 1934 states that: the Bank may maintain expert staff to study various aspects of rural credit and development and in particular, it may:- (a)tender expert guidance and assistance to the National Bank (NABARD) and (b) conduct special studies in such areas as it may consider necessary to do so for promoting integrated rural development...
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