M .Naga M.B.A 2ndyear 09D31E0021 SEMINOR ON RESERVE BANK OF INDIA
INTRODUCTION The reserve bank of india is the central bank of the country.it has been established as a body corporateunder the RBI act wich came into effect from 1 st aprial 1935.
<ul><li>The Reserve Bank of India has four regional representations: North in New Delhi, South in Chennai, East in Kolkata and West in Mumbai. </li></ul><ul><li>The representations are formed by five members, appointed for four years by the central government and serve - beside the advice of the Central Board of Directors - as a forum for regional banks and to deal with delegated tasks from the central board The institution has 22 regional offices. </li></ul>
Monetary authority <ul><li>The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. </li></ul><ul><li>It formulates, implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors. </li></ul><ul><li>Objectives are maintaining price stability and ensuring adequate flow of credit to productive sectors. </li></ul><ul><li>The national economy depends on the public sector and the central bank promotes an expansive monetary policy to push the private sector since the financial market reforms of the 1990 </li></ul>
Manager of exchange control <ul><li>The central bank manages to reach the goals of the </li></ul><ul><li>Foreign Exchange Management Act, 1999. </li></ul><ul><li>objectiveto facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India. </li></ul>
Issuer of currency: The bank issues and exchanges or destroys currency and coins not fit for circulation. The objectives are giving the public adequate supply of currency of good quality and to provide loans to commercial banks to maintain or improve the GDP.
Developmental role: <ul><li>The central bank has to perform a wide range of promotional functions to support national objectives and industries. </li></ul><ul><li>The RBI faces a lot of inter-sectoral and local inflation-related problems. Some of this problems are results of the dominant part of the public sector. </li></ul>
Related functions: <ul><li>The RBI is also a banker to the government and performs merchant banking function for the central and the state governments. </li></ul><ul><li>. It also acts as their banker. The National Housing Bank (NHB) was established in 1988 to promote private real estate acquisition. </li></ul>
] RBI has various tools to control which are listed below: <ul><li>Bank Rate: RBI (Reserve Bank of India) lends to the commercial banks through its discount window to help the banks meet depositor’s demands and reserve requirements. </li></ul><ul><li>b) Cash Reserve Requirements (CRR): Every commercial bank has to keep certain minimum cash reserves with RBI. RBI can vary this rate between 3% and 15%. </li></ul><ul><li>(c) Statutory Liquidity Requirements (SLR): Apart from the CRR, banks are required to maintain liquid assets in the form of gold, cash and approved securities. </li></ul>
References: <ul><li>Cecil Kisch: Review "The Monetary Policy of the Reserve Bank of India" by K. N. Raj . In: The Economic Journal . Vol. 59, No. 235 (Sep., 1949), pp. 436–438. </li></ul><ul><li>Findlay G. Shirras: The Reserve Bank of India . In The Economic Journal . Vol. 44, No. 174 (Jun., 1934), pp. 258–274. </li></ul><ul><li>Narenda Jadhav, Partha Ray, Dhritidyuti Bose, Indranil Sen Gupta: THE RESERVE BANK OF INDIÀ`S BALANCE SHEET: ANALYTICS AND DYNAMICS OF EVOLUTION , November 2004. </li></ul>