A detailed explanation of RBI.

1. RBI

3. R O L E O F R
B I
T H E
RBIGovernor-ShaktikantaDas

4. R E S E R V E B A N K O F INDIA
The Reserve bank of India isthe Central bank and bankingAuthority in the country. It
is also known asthe banker of all banks!
It manages the monetary policy for the Indian rupee, which is the country's official
currency. The RBI's primary responsibilitiesinclude issuing money, preserving India's
monetary stability, managing the currency, and upholding the nation's creditsystem.

5. Okay, but what are some ofitsroles?
Ensures price stability through
monetarypolicies.
• Ensures Economic Growth.
• Regular changesin the credit control measures.
• Bank Rate/ Repo Rate
Settingup of
MIBOR.
Mumbai Inter bank Overnight Rate
Interest charged by one bank on the loan given to another
bank

6. RBIregulates thefinancial system of our country.
• Regulates and supervisesthe activity of other banks.
• Building the confidence of the public in the banking system.
• Bank license, inspections, offsite surveillance etc.
Formulation of BCSBI.
The standard boarding of India and Banking codes
To calculate the standards of other banks and their banking practices

7. Check on Inflation.
• Inflation target of 4%with a +/- 2%tolerance band.
• Lower Interest rateslead to more borrowings.
MonetaryManagement.
Influences cost and availability of money in the economy

8. Issueof Currency.
• Monopoly over currency printing.
• Does not deal with Coins(GOI).
Custodian of country’s forex
reserves.
Responsible for maintaining the value ofthe Rupee outside the
country Aidsforeign

9. trade payment

10. B R IE F O F W H A T TH
E K E TA N P A R E K H
SC A M W A S
By securing loansfrom financial institutions including
Global Trust Bank and Madhavpura Mercantile
Cooperative Bank, he utilised to fraudulently rig the
values of hand-selected equities known as K-10 stocks.
Additionally, he wasfound guilty ofthe Canfina mutual

11. fund scandal, a more than Rs 47 crore fraud.
Although this was majorly a Stock Market Scam, it
was fueled by the RBI loopholes and banking
regulations.
K E T A N P A R E K H
# 1

12. LA C K O F R E G U LAT I O N S
I N O T H E R S T O C K
E X C H A N G E S
Lack of regulations in non primary stock
exchanges had often allowed a lot of illegal
activities and many loopholesthat were
exploited by the people.
Thislack of attention by the SEBI and RBI
allowed Ketan Parekh to scam so many
people and allowed him to manipulate the
market.

13. # 2
LA C K O F R E G U LAT I O N
S I N F D I A N D F I
The regulations and boundary of
control over Foreign institutional
investors and foreign direct
investmentsinto indian companies had
no clear regulations.
This allowed large foreign players to
manipulate the market with large sums
of capital.

14. # 3
C O N C E N T R AT I O N O N
L O W C O S T S H A R E S
W H I C H A R E W AY M O R E
E A S I E R T O M A N I P U LAT E
The simple truth is,small cap companies
with lower market capitalization are an
extremely easy target for wealthy investorsto
manipulate using large sums of money.
Till today, a lot of companies that don't even

15. have a real good business,reach high share
pricesfollowed by a dump because they were
manipulated by a single person.
# 4
N O T R A N S PA R E N C Y O F
D E P O S I T O R ' S M O N E Y I
N T H E S Y S T E M
RBI guidelines at the time were not
strict enough and had extremely long
delaysin reporting the status of
consumer funds, transactions and
change of handsfor money.

16. Thisled to an opaque system where
the depositer didn't even know where
their money was as at certain periods
of time..
# 5
I N S I D E R T R A D I N G
Though Insider trading isillegal and a
punishable offence, the private
information of companies exchanged
hands, giving accessto privileged

17. information to some people before
othersmaking the entire system
extremely unfair.
STEPS A N D

18. M E A S U R E S TAKEN
1. Preventedthe misuse of
Banking Receipts:
RBI issued a circular to banks
forbidding sale transactions unless
they held the actualsecuritiesin their
investment account.
2. Legal Framework forRegulation
andSupervision of Payment
Systems:
The Payment and Settlement SystemsAct, defines paymentsystem

19. as “a system that enables payment to be effected between a payer
and a beneficiary, involving clearing, payment or settlement
services or all of them, but does not includes a stock exchange”.
3.Regulation and
Supervision of Payment
Systems
4. Implementation of “Principle of Financial MarketInfrastructure”in India for regulation andsupervision of FMIs
REFERENCES
• https://www.rbi.org.in/
•https://en.wikipedia.org/wiki/Reserve_Bank_of_India •
https://opportunities.rbi.org.in/scripts/roles.aspx •
https://blog.ipleaders.in/ketan-parekh-scam/

20. • https://www.managementstudyguide.com/ketan-
parekh scam.htm
• https://www.moneylife.in/article/rbi-in-the-crosshairs-at-
last an-action-that-was-long-overdue/57367.html
T H A N K Y O U