Reserve Bank of India

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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

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 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

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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

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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

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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”

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 BRIEF HISTORY (1 OF 2)

 It was set up on the recommendations of the HILTONYOUNG

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

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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 June1949)
 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

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 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

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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

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GOVERNORS (2 of 2)

Raghuram Rajan
4 September 2013 to 4 September 2016

Urjit Patel
September 4, 2016 to
December 11,2018

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Shaktikanta Das
12 December 2018 - present

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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

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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 thepublic

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

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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

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 INSTRUMENTS OF CREDIT CONTROL

 Quantitative or General Methods

 Qualitative or Selective Methods

Quantitative Qualitative
 Bank Rate  Selective Credit Control
 Open Market  Rationing of Credit
 Reserve Ratio (CRR)
 Statutory Liquidity Ratio(SLR)
 Repo and Reverse Repo Ratio

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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

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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 (NABARD)
 The reserve Bank of India has recently divested stake in State Bank of
India to the government of India

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Related
Functions
 RBI also regulates the opening / installation ofATM
 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

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 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

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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

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Source
s
www.rbi.org.in

www.financialexpress.com

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THANK YOU

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