The Reserve Bank of India (RBI) was established in 1934 according to the RBI Act. It serves as India's central bank and regulates banking institutions. RBI aims to maintain monetary stability and a sound banking system in India. It has regulatory functions over banking in India and manages the country's foreign exchange and gold reserves. RBI also acts as the government's bank and lender of last resort for banks. Its key responsibilities include issuing currency, managing credit and foreign exchange, and supervising commercial banks.
2. Contents
5) Functions of RBI
3) Objectives of RBI
4) Structure of RBI
1) Introduction
& History
6) Conclusion
3. Introduction and History
Origin
The Hilton-Young Commission
recommended the creation of a Central
Bank for India to separate the control of
currency and credit from the Government
and to improve Banking facilities
throughout the country.
1926
RBI Act
The Reserve Bank of
India Act, 1934 was
enacted and the RBI was
established.
1934
Nationalisation
After the establishment, in 1949, the
RBI was nationalised and fully
controlled by the Government of
India.
1949
4. Objectives of RBI
Issue of Bank Notes
Keeping of Reserves
Securing Monetary Stability
Operating the currency and credit
system of the Country
- As laid down in the Preamble of the Reserve Bank of India Act, 1934.
6. Structure of RBI
Deposit Insurance and Credit
Guarantee Corporation (DICGC)
Bharatiya Reserve Bank Note Mudran
Private Limited (BRBNMPL)
Bharatiya Reserve Bank Note Mudran
Private Limited (BRBNMPL)
National Bank for Agriculture and
Rural Development (NABARD)
- Subsidiaries of RBI
7. Functions of RBI
Banks’ supervision
Exchange
Management and
Control
Monetary Regulation
and Management
Issue of Currency
notes
Banker to the Banks
Banker to the
government
8. Issue of Currency Notes
• To ensure adequate quantity of supplies
of currency.
• Issues new currency and destroys
currency & coins out of circulating.
• It has to keep gold and foreign security
against the notes and coins issued.
9. Banker to the Government
• Performs all banking function for the
central and the state government and also
acts as their banker except that of Jammu
and Kashmir.
10. Banker to Banks
• Maintains banking accounts of all scheduled
banks.
• RBI also regulates the opening or installation of
ATM.
• RBI regulates the opening of branches by banks.
• RBI also regulates trade of gold.
• It issues guidelines and directives for the
commercial banks.
11. Monetary Regulation and Management
• Maintaining price stability ensuring
adequate flow of credit in the economy.
• RBI formulates, implements and monitors
the Monitory Policy.
• Instruments of regulating monitory Policy
are basically of two categories:
Quantitative Measures.
Qualitative Measures
12. Monetary Regulation Instruments
• Quantitative Measures
Bank Rate.
Repo Rate.
Reverse Repo Rate.
Cash Reserve Ratio (CRR).
Statutory Liquidity Ratio (SLR).
• Qualitative Measures
Direct Action.
Moral Persuasion.
Legislation.
Publicity.
13. Banks’ Supervision
• Licensing of Banks.
• Branch Licensing Policy.
• Approval of Capital, reserves and liquid
assets of banks.
• Inspection of banks.
• Audit.
• Control over amalgamation and liquidation.
14. Exchange Management and Control
• To facilitate external trade and payment and
promote orderly development and maintenance of
foreign exchange market in India.
• It acts as a custodian and Manages the Foreign
Exchange Management Act, (FEMA) 1999.
• RBI maintains the exchange rate of Rupee v/s
foreign currencies like US Dollar, Euro, Pound and
Japanese Yen.
15. Conclusion
Hence after knowing all the facts and figures relating the
Reserve Bank of India, it is plausible to conclude that RBI
supports our nation’s economy in a vital manner. Its Policies
and decisions, affect the value of the Indian currency and we
can also state that it is the backbone of Indian Economy
