Recommended
More Related Content
What's hot
What's hot (20)
Similar to RBI's Central Role in India's Economy and Monetary Policy
Similar to RBI's Central Role in India's Economy and Monetary Policy (20)
Recently uploaded
Recently uploaded (20)
RBI's Central Role in India's Economy and Monetary Policy
- 1. Presented by: kiran kumar.L Class:b.com 1st sem Reg no: 16103016
- 3. Introduction Organisation of RBI RBI branches Objectives Governors list RBI functions Instruments of monetary policy
- 4. Introduction:- •RBI is India's central banking institution •It controls the monetary policy of the Indian rupee •Established on 1st April 1935 •As per RBI act 1934 • its paid up capital 5crorers •By private share holders •RBI was nationalized in the year 1949 •The original choice for the seal of RBI was •East India company double mohur •The sketch of the lion and palm •RBI initially established in Kolkata •It was permanently moved to Mumbai in 1937 •The RBI also acted as Burma's central bank (1942-45) •After the partition of India in 1947 the bank served as the central bank for Pakistan until june1948 •RBI fully owned by govt of India on 1949
- 5. Organisation of reserve bank of India :- The organisation of RBI consists of the following:- 1)Central board 2) Local board 1)Central Board:- •The reserve banks affairs are governed by a central board of directors •the board appointed by the govt of India •In kipping with the RBI act nominated for a period of four years •Governor and not more than four deputy governor •Nominated by govt ten from various fields •Two govt officials •Four directors one each from four local boards •2)Local Board :- •four region of the country •Mumbai, Calcutta, Chennai and New Delhi •It consists of five members appointed by the central govt •The function of its to advice the central board
- 8. RBI Branches :- •The RBI has four zonal offices •At Chennai, delhi , kolkata and mumbai •It has 19 regional offices •Located in Ahmadabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, jammu, Kanur, cochin, Kolkata, luck now, Mumbai, Nagpur, Patna and Thiruvanthapuram •It has 9 sub offices •Located in Agartala, Dehradun, Gangtok, Panaji, Raipur, Ranchi, Shillong, Shimla and Srinagar •It recently the RBI opened two more sub offices •At Aizawal and Imphal
- 12. Objectives of RBI:- •To manage the monetary and credit system •To stabilises internal and external value of rupee •For balanced and systematic development of banking •For the development of organised money market •For proper arrangement of agriculture finance •Arrangement of industrial finance •Arrangement of public debts •To establish monetary relations with other countries of the world •And international financial institutions •Centralisation of cash reserves •To maintain balance b/w the demand and supply of currency •
- 13. Governors:-
- 20. FUNCTIONS OF RBI Traditional functions Promotional functions Supervisory functions Monopoly note issue Banker to the govt Agent & advisor to the govt Banker’s bank Lender of last resort Clearing house Leader of money market Controller of credit Custodian of foreign exchange reserve Promotion of banking habits Ref inance for export prmotion Facilitates' for agriculture finance Facilitates for industrial finance Helps co-operative sector Research function Special function Implementation of the deposit insurance Control over NBFIs Periodical review of the working of the commercial banks Granting license to banks
- 21. 1)Traditional function A) Monopoly note issue :- •It issue currency notes from10,20,50,100,500and2000 •It follow minimum reserve system •It as to maintain reserve of gold,silver,and foreign exchange •It has to maintain minimum reserves of 200crores •In that 115crores in the form of gold •Remaining 85crorers foreign exchange •Re1 note and coins issued by govt of India not RBI
- 22. B) Banker to govt:- •Collects tax’s and makes payment •Behalf of the govt •Accept deposits from the govt •Collect cheques and drafts deposited in govt a/c •Provides short term loan to govt •Keep the a/c of various govt department C)Agent and advisor of the govt :- •It accepts loans and manage public debts •It issue govt bonds •It issue money market securities like treasury bill •Acts as the financial adviser
- 23. D) Bankers to the banks:- •All commercial banks are managed and controlled by RBI •Its regulations related to their licencing,liquidity of assets •Every banks as to maintain certain portion •Of its all total deposits •In the form of cash reserve with the RBI •Helps in financial difficulty E) Lender of last resort:- •It helps in the time of financial crisis •To get financial assistance RBI come their rescues •Banks can approach loan from RBI •It lends money against the rediscounting • of the bills of exchange or govt securities
- 24. F)Clearing house:- •It acts for transfer and settlement of mutual claims of banks •Easy for banks to settle each others debts or •Transfer of funds from one bank to another •Through RBI •Inter-bank indebtedness can be easily settled •Without using cash G)Leader of money market :- •RBI is the leader of money in the country •It controls the activites of different components •Of money market such as •Commercial banks, financial institutions etc
- 25. H) Controller of credit :- •It is an tool used by RBI •A major weapon of the monetary policy •To control the demand and supply of money •It uses various credit control measures such as •Bank rates, open market operations •Variable reserve ratio and selective credit control I)Custodian of foreign exchange reserve:- *The RBI acts as a CFER *It maintain reserves like gold silver and foreign exchange To issue currency notes and to meet payments It has to maintain exchange rates and enforce exchange control
- 26. 2) Promotional function:- A)Promotion of banking habits:- *As an apex organisation the RBI always tire to promote *The banking habits *It institutionalizes savings and takes measures *An expansion of the banking network *It has set up many institutions such as DIC-1962 *IDBI-1964, NABARD-1982
- 27. B) Facilitates for agriculture finance :- •The co-operative credit institutions •It has set up an agriculture credit department •Separate funds for providing •Medium and long term finance •Through NABARD •C)Facilitates for industrial finance:- •Provides credit facilities •To both small and large scale industries •Through SFC ,IFCI,IDBI,ICICI etc •It also established national industrial credit fund •In 1964to provide financial assistance •to large scale industries
- 28. •D)Refinance for export promotion :- •RBI always tries to encourage finance for foreign trade •Especially export from India •EXIM BANK and ECGC are supported by refinancing •Rate of interest on export credit •E)Helps co-operative sector:- •it provides indirect financing to SCB •Connects the main banking system of country •Finance routed through NABARD
- 29. 3) Supervisory function of RBI:- A) Granting license to banks:- *It given for opening extension counters, new branches *RBI can avoid unnecessary competitions *Adequate banking facility to various region B)Research function:- *It collects and publishes information *Like agriculture industrial etc *It helps for govt
- 30. c) Special functions :- •It conducts debts and seminar •It provides training facilities •It maintain contact with other countries •d) Control over NBFIs:- •It not influenced by monitory policy •RBI has a right to issue directives •NBFCs requires permission
- 32. RBI CONTROLS MONETARY OF THE INDIA AND TAKING THE HIGHER AUTHORITY OF INDIAN ECONOMY. RBI CONTROLS THE INFLUENCE AND DEFLUCITION OF THE INDIAN ECONOMY.