The Reserve Bank of India was established in 1934 following the Reserve Bank of India Act. It was initially privately owned but was nationalized in 1949 and is now fully owned by the Government of India. As the central bank and monetary authority, the RBI regulates banking operations and financial systems in India in order to maintain public confidence, protect depositor interests, and provide cost-effective banking services. It issues currency (except the 1 rupee note), implements monetary policy tools like cash reserve ratios to control money supply and credit in the economy, and oversees banks and financial institutions.

4. ▪ HISTORY OF RESERVE BANK OF INDIA The Reserve Bank of India was established
following the Reserve Bank of India Act of 1934.Though privately owned initially, it
was nationalised in 1949 and since then fully owned by Government of India .The
Reserve Bank of India was founded on 1 April 1935 to respond to economic
troubles after the FirstWorld War. The Reserve Bank of India was conceptualised
based on the guidelines presented by the Central Legislative Assembly which
passed these guidelines as the RBI Act 1934.

5. ▪ Regulator and supervisor of the financial system: Prescribes broad parameters of
banking operations within which the country’s banking and financial system
functions. Objective: maintain public confidence in the system, protect depositors’
interest and provide cost-effective banking services to the people
▪ The most important function of RBI is the issuance of currency notes and coins,
except the one rupee note and coin which are issued by the Ministry of Finance. All
other notes bear the signature
▪ CC is a very useful tool used by RBI, as a weapon of the monetary policy used to
control and maintain the demand and supply of money.ure of the RBI
Governor.ublic.

6. ▪ Banks and financial institutions make money from the funds they lend out to their clients.
These funds come from the money clients deposit in their checking and savings accounts or
invest in certain investmentvehicles such as certificates of deposit (CDs). In return for using
their services, banks pay clients a small amount of interest on their deposits. As noted, this
money is then lent out to others and is known as bank credit.
▪ Bank credit consists of the total amount of combined funds that financialinstitutionsadvanceto
individualsor businesses. It is an agreement between banks and borrowers where banks make loansto
borrowers. By extending credit, a bank essentially trusts borrowers to repay the principal balanceas
well as interest at a laterdate. Whether someone is approvedfor credit and how much they receive is
based on the assessment of their creditworthiness.

7. ▪ During inflation the RBI sells its securities. Buyer of the securities pays the amount
by withdrawing their deposits from the banks. This reduces the cash holdings of
the commercial banks and a reduction of cash reserve would reduce the loans and
advances given by them and hence reduce the credit flow in the economy.
In the Indian economy, the RBI's role in credit control is crucial. The Reserve Bank of
India controls the flow of credit in our economy in order to keep inflation and economic growth
in check. Credit changes can cause market instability, so credit control policies must be carefully
planned before being implemented.

8. ▪ RBI, also called the Monetary Authority of India, was set up on the recommendation
of the HiltonYoung Commission.
▪
▪ The statutory status of the RBI is provided under the Reserve Bank of India Act of
1934,and become operational on April 1, 1935.
▪
▪ Moreover, when RBI came into force it takes over the functions of Government so
far being performed by the Controller of Currency and from the Imperial Bank of
India.
▪
▪ Additionally, after India’s Partition, The RBI served as the Central Bank of Pakistan
up to June 1948.

9. Credit control is a business strategy that promotes the selling of goods or services
by extending credit to customers. Most businesses try to extend credit to customers
with a good credit history so as to ensure payment of the goods or services.
Credit controlis a critical system of control that prevents the business from becoming illiquid
due to improper and un-coordinatedissuance of credit to customers. Credit control has a
number of sections that include - credit approval,credit limit approval,dispatchapprovalsas
well as collectionprocess.

10. ▪ The central bank is a government-controlled bank that regulates a country’s
financial affairs by setting key interest rates, issuing currency, overseeing
commercial banks, and controlling the foreign exchange rate. Credit control, on the
other hand, is a method used by manufacturers and merchants to encourage
excellent credit among creditworthy borrowers while denying credit to delinquent
borrowers.
▪
▪ The central bank may occasionally fail to maintain optimal credit flow regulation.

11. •Thank You