This presentation gives an overview of Reserve Bank of India. It also focuses on the various important functions of the RBI.

1. By-Ms Bushra Begum
Asst Professor, MBA
Apollo Institute of Technology, Kanpur.
RBI-Overview, Roles & Functions

2. Overview of RBI :-
 RBI or Reserve Bank of India is the central bank of the country.
 Earlier, during British time, there was no central bank in the country. So, the need
to establish a central bank was felt.
 So for establishing a separate central bank for the country, an act was passed
i.e. The Reserve Bank of India Act in 1934.
 RBI was established on 1 April 1935 under the provisions of RBI Act,1934.
 It was nationalized on 1 January 1949.
 It is fully owned & operated by Government of India.
 Its Zonal offices are located in Delhi, Mumbai, Chennai, Kolkata & it has total 31
offices all over India.

3. Roles & Functions of RBI :-
1. Monetary Authority
a) It formulates & implements the monetary policy of India.
b) Tries to maintain the price stability in all sectors while also keeping the
objective of growth.
2. Regulatory & Supervisory body
a) Frame such rules or parameters for the banks & financial institutions
within which they ( banks ) have to follow and work .
b) Protect investors interest & provide cost effective banking to the
public.

4. 3. Issuer of Bank Notes
a) RBI has the sole right to issue currency notes except one rupee
notes which are issued by the Ministry of Finance.
4. Banker to Government
a) RBI manages the banking needs of the government.
b) It maintain & operate the government’s accounts.
c) It collects receipts of funds & make payments on behalf of the
government.
d) It represents the Government of India as the member of IMF &
World Bank.

5. 5. Custodian of Cash Reserves of Commercial
Banks
a) The commercial banks have to deposit a fixed amount of money as a
reserve with RBI. This is known as Cash Reserve Ratio (CRR).
b) Thus, RBI keeps the reserves of the banks under its custody.
6. Custodian of Country’s Foreign Currency
Reserves-
a) The RBI also keeps the international currency of the country under
its custody.
b) This enables the RBI to deal with crisis situation connected with
adverse Balance of Payment position.

6. 7. Lender of Last Resort
 When the commercial banks are in short of money, they go to RBI for
borrowing money.
 Thus, in times of emergency and to remove the financial difficulties of
banks, RBI comes to their rescue , although charge interest rates from
banks known as Repo Rate.
8. Developmental Role
 It promotes the development of the financial system of the country by
making such effective policies.
 It also promotes the rural & agriculture segment of the country. It has
successfully done this by increasing the flow of credit to this sector.
NABARD , RRBs are few examples.