Preamble<br />The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as:<br />“...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.”<br />
Background<br /><ul><li>Established under RBI Account of 1934
Controller of Credit</li></li></ul><li>RBI SHARE CERTIFICATE<br />
Central Board<br />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. <br /><ul><li>Appointed/nominated for a period of four years
Local Boards<br />One each for the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi<br />Membership:<br />consist of five members each<br />appointed by the Central Government<br />for a term of four years<br />Functions :To advise the Central Board on local matters and to represent territorial and economic interests of local cooperative and indigenous banks; to perform such other functions as delegated by Central Board from time to time. <br />
Powers and <br />responsibilities<br />of RBI in respect of regulation of banks<br />The Reserve Bank of India has been entrusted with the responsibility under the Banking Regulation Act, 1949 to regulate and supervise banks' activities in India and their branches abroad. While the regulatory provisions of this Act prescribe the policy framework to be followed by banks, the supervisory framework provides the mechanism to ensure banks' compliance with the policy prescription. <br />
Banking Supervision<br /><ul><li>Organisation of the Supervision Function
Supervision of overseas branches of Indian banks
Uniform guidelines on Write-off/ compromise settlements
Selective Credit Control</li></li></ul><li>WHAT’S THAT<br />CRR<br />Also called the cash reserve ratio, refers to a portion of deposits (as cash) which banks have to keep/maintain with the RBI.<br />Bank Rate<br />This is the rate at which RBI lends money to other banks (or financial institutions) <br />SLR<br />Besides the CRR, banks are required to invest a portion of their deposits in government securities as a part of their statutory liquidity ratio (SLR) requirements. <br />Reverse Repo Rate<br />This is the exact <br />opposite of repo rate. <br />Repo (Repurchase) Rate<br />Repo rate is the rate at which banks borrow funds from the RBI to meet<br /> the gap between the demand they <br />are facing for money (loans) and how much they have on hand to lend. <br />
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