Role and Function of Rbi

Topics: Bank, Central bank, Foreign exchange market Pages: 7 (1450 words) Published: December 7, 2011
Assignment No 1
Role and Function of RBI
Reserve bank of India (RBI) is nation’s central bank.
RBI began operation since 1935, and stood at the centre of India’s financial system, with a fundamental commitment to maintaining the nation’s monetary and financial stability. From ensuring stability of interest and exchange rates to providing liquidity and an adequate supply of currency and credit for the real sector; from ensuring bank penetration and safety of depositors’ funds to promoting and developing financial institutions and markets, the Reserve Bank plays a crucial role in the economy. Our decisions touch the daily life of all Indians and help chart the country’s current and future economic and financial course. Over the years, our specific roles and functions have evolved. However, there have been certain constants, such as the integrity and professionalism with which the Reserve Bank discharges its mandate. Organization Structure:-

Central Board of Directors by the Numbers Official Directors 1 Governor
4 Deputy Governors, at a maximum
Non-Official Directors
4 directors—nominated by the Central Government to represent each local board 10 directors nominated by the Central Government with expertise in various segments of the economy. 1 representative of the Central Government

6 meetings—at a minimum—each year
1 meeting—at a minimum—each quarter
Below diagram shows the current structure of the Reserve Bank of India (RBI).

Central office departments:-
Over the last 75 years, as the functions of the Reserve Bank kept evolving, the work areas were allocated among various departments. At times, the changing role of the Reserve Bank necessitated closing down of some departments and creation of new departments. Currently, the Bank’s Central Office, located at Mumbai, has twenty-seven departments. These departments frame policies in their respective work areas. They are headed by senior officers in the rank of Chief General Manager. Markets Department of External Investments and Operations Financial Markets Department

Financial Stability Unit
Internal Debt Management Department
Monetary Policy Department
Regulation Department of Banking Operations and Development &Supervision Department of Banking Supervision
Department of Non-Banking Supervision
Foreign Exchange Department
Rural Planning and Credit Department
Urban Banks Department
Research Department of Economic Analysis and Policy Department of Statistics and Information Management Services Customer Service Department

Department of Currency Management
Department of Government and Bank Accounts
Department of Payment and Settlement Systems

Support Department of Administration and Personnel Management Department of Communication
Department of Expenditure and Budgetary Control
Department of Information Technology
Human Resources Development Department
Inspection Department
Legal Department
Premises Department
Rajbhasha Department
Function s and Role of the RBI:-

The functions of the Reserve Bank today can be categorized as follows:

* Monetary policy
Formulates implements and monitors the monetary policy.
Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.

* Regulation and supervision of the banking and non-banking financial Institutions, including credit information companies

* Regulation of money, forex and government securities markets as also Certain financial derivatives
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 * Debt and...
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