RBI - India's Central Bank

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  • Topic: Monetary policy, Central bank, Federal Reserve System
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भारतीय रिज़र्व बैंक

Reserve Bank Of India

India’s Central Bank

Chhatrapati shahu ji maharaj University
Financial Institution and Markets

Submitted To:Submitted By:
Dr. S. PandiyaReshma Singh
Deepak Tiwari
Alok Mishra
Neha Mishra
MBA(F&C) II nd- semester

The Reserve Bank of India is the central bank of India and controls the monetary policy of the rupee as well as 171 billion US-Dollar (2006) currency reserves.

The Reserve Bank of India was established on April 1, 1935 during the British-Raj in accordance with the provisions of the Reserve Bank Of India Act, 1934 . The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India. Preamble-

The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and 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."

The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. * Appointed/nominated for a period of four years

* Constitution:
* Official Directors
* Full-time : Governor and not more than four Deputy Governors * Non-Official Directors
* Nominated by Government: ten Directors from various fields and one government Official * Others: four Directors - one each from four local boards Central Board

The RBI is monitored by a central board of directors. The board is appointed by the Government of India in accordance with the RBI act.

Local Boards
* Local Boards are present in the four metros of Mumbai, Calcutta, Chennai and New Delhi. * Local Board consists of five members.
* Local Board is appointed by the Central Government.
* Local Board is for a period of four years.
The RBI have to maintain:
* Monetary Authority.
* Regulator and supervisor of the financial system..
* Manager of Foreign Exchange.
* Issuer of currency.
* Developmental role in financial infrastructure.
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. Roles Of RBI
* Note Issuing Authority
* Government Banker
* Bankers’ Bank
* Supervising Authority
* Exchange Control Authority
* Promoter Of the Financial System
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