Secsec

1. DR.AMBEDKAR ARTS AND COMMERCECOLLEGE
YERWADA, PUNE-06
M.COM (II) 2019 CREDIT PATTERN
NAME OF THE SUB: INTERNATIONAL FINANCE
NAME OF THE STUDENTS:- Mahesh Uttam Wabale
ROLL NUMBER :- { }
NAME OF THE TOPIC:-ROLE OF RBI IN CONTROLLING and
SUPERVISION OF FOREIGN BANKING
NAME OF THE GUIDE:-PROF .KHOPADE M.D.

2. ROLE OF RBI IN CONTROLLING and
SUPERVISION OF FOREIGN BANKING
• Department of Banking Supervision
• The Banking Regulation Act, 1949 empowers the
Reserve Bank of India to inspect and supervise
commercial banks. These powers are exercised
through on-site inspection and off site surveillance. Till
1993, regulatory as well as supervisory functions over
commercial banks were performed by the Department
of Banking Operations and Development (DBOD).

3. • Basic objectives
• The basic purpose of
banking supervision is
to safeguard the
stability of the
financial system, in
order to prevent the
vital role of the
banking sector in the
economy from
suffering significant
shocks or even
collapsing

4. • How is RBI controlling
the commercial banks?
• RBI controls the
commercial banks
viavarious instruments like
Statutory Liquidity Ratio
(SLR), Cash Reserve
Ratio (CRR), Bank Rate,
Prime Lending (PLR),
Repo Rate, Reverse Repo
Rate and fixing the
interest rates and deciding
the nature of lending to
various sectors

5. • These are those
ratios and rates that
are fixed by RBI and it
is mandatory for all
the commercial banks
to follow or maintain
these rates. All these
measures control the
commercials banks'
operations and also
control money supply
in Indian economy.

6. Role of RBI
•The primary duty of the RBI is to implement monetary policy
•The Central Government’s Monetary Policy Committee (MPC), established
under Section 45(B), determines the policy interest rate required to achieve
the inflation target
•The RBI also conducts economic research to promote economic growth
•It is in charge of the nation’s currency’s design, production, and overall
management, ensuring an adequate supply of clean and genuine notes
•Section 22 of the RBI Act empowers the bank to issue currency notes, except
for one rupee note, which the Ministry of Finance issues
•The Government of India is the coin-issuing authority, and the Reserve Bank
receives coins on demand

7. Supervision over FIS
On the basis of the recommendations made by an in-house group, the monitoring of the
financial institutions first started after 1990. This was done through prescribed quarterly
returns on liabilities / assets, source and deployment of funds, etc. The objective of this
monitoring was to obtain a macro level perspective for evolving monetary and credit
policy, to assess the quality of assets of the financial system and to improve co-ordination
between banks and FIs. In 1994, these institutions were brought under the prudential
regulation of the Reserve Bank.

8. • Supervision limits
• Management and administration of the institutions.
Although directors and managers are responsible for the
progress, successes and failures of the institution, the
supervisor carries out the necessary analysis and
verifications to obtain a reasonable awareness of their
solvency and situation.
• External auditing of accounts. The external auditor is
required to check and report whether the annual accounts
give a true and fair view of the net worth, financial position
and net profit of the company audited. It states its opinion
in a report filed at the Mercantile Registry, to ensure that it
has adequate publicity and to secure the relevant effects
vis-à-vis third parties.

10. Sincerely Thanks to :-
Prof. PROF .KHOPADE
M.D. MADAM