BRIEF HISTORY… It was set on the recommendations of Hilton young commission. It was started as share-holders bank with the paid up capital of 5 crores Initially it was located in kolkata It moved to mumbai in 1937 Initially it was privately owned
BRIEF HISTORY… Since nationalization in 1949,the reserve bank is fully owned by the government of india Its first governor was Sir Osborne A.Smith (April 1, 1935 to june 30, 1937) The first indian governor was “Sir ChintamanD.Deshmukh” (August,1943 to june 30,1949) On june 27,2006 the union government of india reconstituted the central board of directors of the Reserve bank of india(RBI) with 13 members including AzimPremji and Kumar Mangalam Birla
GOVERNORS… Sir Osborne A.Smith April 1 ,1935 to June 30 ,1937 Sir ChintamanD.Deshmukh August 11 ,1943 to June 30 ,1949
GOVERNORS… Dr. Y.V. Reddy September 6 ,2003 to September 5 ,2008 Dr. D. Subbarao September 2008 onwards
PREAMBLE The preamble of reserve bank of india describes the basic functions of 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 country to its advantage”
ceNTRAL BOARD The reserve bank’s affairs are governed by central board of directors.The board is appointed the govt. of india as per Reserve Bank of India Act Appointed/nominated for a period of four years Constitution: Full time:governor and not more than four deputy governors
CENTRAL BOARD Non-Official Directors Nominated by government:ten directors from various fields and one government official Others: four directors – one each from four local boards Function: general superintendence and direction of bank’s affairs
RBI Headquarters’ Delhi entrance with the yakshini sculpture depicting‘prosperity through agriculture’
Local board One each for the four regions of country in Mumbai,Culcatta,Chennai,New Delhi Membership: Consist of five members each Appointed by the Central Government For a term of four years
Local board Functions: to advice the central board on local matters and to represent territorial and economic interests of local cooperatives and indigeneous banks. To perform such other functions as delegated by central board from time to time
Functions of rbi… Monetary Authority Regulator &supervisor of financial system Manager of foreign exchange Issuer of currency Developmental role
Formulate monetary policy Objective: Maintain price stability and ensuring adequate flow of credit in the economy. What R.B.I does. It formulates ,implements and monitors the monetary policy instruments: qualitative and quantitative.
BANK RATE also called discount rate.it also called repo rate.
OPEN MARKET OPERATIONS buying and selling of govt. securities
VARIABLE RESERVE RATIO It includes C.R.R and S.L.R
qualitative measures Margin requirements Moral suasion Rationing of credit
regulate the financial system objective: to maintain public confidence in the system, protect depositors interest & and provide cost effective banking services to the public What R.B.I does prescribes broad parameters of banking operations within which the country’s banking and financial system functions. The R.B.I performs this function under the guidance for financial supervision(BFS) Lender of last resort
Issue of currency Objective: to ensure adequate quantity of supplies of currency notes and coins of good quality What R.B.I does…. Issues new currency and destroy currency and notes not fit for circulation. It has to keep in forms of gold and foreign securities as per statutory rules against notes and coins issued.
Development role Objective: To develop the quality of banking system in india What R.B.I does…. Perform a wide range of promotional functions to support national objectives. To establish financial institution of national importance, for eg: NABARD,IDBI etc
subsidiaries Fully owned: National Housing Bank(NHB), Deposit Insurance and Credit Guarantee Corporation of India(DICGC), Bhartiya Reserve bank Note MudranPrivate Limited(BRBNMPL) Major stakes: National Bank For Agriculture and Rural Development(NABARD) Reserve bank of india has recently disvested its stake in state bank of india to the government of india R.B.I had also set up some training institutions
Related functions Banker to government: performs all banking functions for the central and state govt. and also act as their banker Banker to banks: Maintain banking accounts of all scheduled banks R.B.I also regulates the opening/installation of ATM Fresh currency notes forATMs are supplied by RBI RBI regulates the opening of branches by banks. It issues guidelines and directives for commercial banks
Role of r.b.i in economic development Development of banking system Development of financial institution Development of backward areas Economic stability Economic growth Proper interest rate structure
Banking sector reforms… Statutory liquidity ratio(SLR) Cash reserve ratio(CSR) Interest rate slabs Prudential norms Capital Adequacy Norms Freedom of operation Supervision of commercial banks Recovery of debts.