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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 governments bank -- Sayers

Structure of Banking in India


Reserve Bank

Commercial Bank
-Public Sector Bank

Co-operative Bank
-State Co-op bank

-Private Sector bank


-Regional Rural Bank

-Central Co-op Bank


-Primary Co-op Soc

Organizational Structure
Governor 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

BRIEF HISTORY

(2 OF 2)

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

GOVERNORS

(1 of 2)

Sir Osborne A. Smith April 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

GOVERNORS

(2 of 2)

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

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
Selective Credit Control Rationing of Credit Moral Persuasion Direct Action

Bank Rate Open Market Operation(OMO) Change in Cash Reserve Ratio (CRR) Statutory Liquidity Ratio(SLR) Repo and Reverse Repo Ratio

OBJECTIVE AND REASONS FOR ESTABLISHMENT OF RBI


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

SUBSIDIARIES..!
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

Related Functions

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

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 nonbanking 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 Speecheswww.speeches.rbi.org.in Monetary and credit Information Reviewwww.mcir.rbi.org.in Report on Trend and Progress of Banking..www.bankreport.rbi.org.in

Sources
www.rbi.org.in www.financialexpress.com

THANK YOU

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