2. Table of Content
1 RBI Roadmap
3 RBI Recent Governors
6 Role of RBI as a Monetary Authority
5 Functions of RBI
7 Role of RBI as a Banker’s Bank
2 RBI Prior Governors
4 Role of RBI
8 Role of RBI as a Money Regulator
3. 9 Role of RBI as a Issuer of currency
11
Quantitative Measures of Credit Control under Monetary
Policy
12 Example of CRR
14 CRR+SLR
15 Example of Repo Rate
16 Current Rates of RBI
17 Impact of Repo Rate /CRR/SLR rate
10 Role of RBI as a Issuer of license
13 Example of SLR
4. 1935
Started as
Share-Holders
Bank with a
paid up capital
of 5 Crs. On 1st
april
1937
Initially it was located in
Kolkata , it moved to
Mumbai
1949
It was the 1st bank to be
Nationalized in
RBI Roadmap
Since nationalization in 1949, the Reserve Bank is fully
owned by the Government of India
5. RBI Prior Governors
Its First governor was Sir Osborne A.
Smith(1st April 1935 to 30th to June 1937)
Sir James Braid Taylor July 1, 1937
to February 17,1943
The First Indian Governor was “Sir
Chintaman D.Deshmukh”(11th August
1943 to 30th June 1949)
6. M. Narasimham (3 May 1977 to 30 November 1977) , Mr. I.G. Patel (1 December 1977 to
15 September 1982) also had significant impact as a RBI governors.
After Mr. H. V. R. Iyengar, P. C. Bhattacharya (1 March 1962 to 30 June 1967), Mr.
Lakshmi Kant Jha
( 1 July 1967 to 3 May 1970)
Mr. B. N. Adarkar (4 May 1970 to 15 June
1970), Mr. Sarukkai Jagannathan (16 June
1970 to 19 May 1975)
N. C. Sen Gupta
(19 May 1975 to 19 August 1975), K. R.
Puri (20 August 1975 to 2 May 1977)
Other RBI governors who had great impact after the independence are,
Mr. Benegal Rama Rau (ICS) , joined RBI in 1 July 1949 hold the post of governor till 14
January 1957.
After 7 and half years Mr. K. G.
Ambegaonkar (ICS), joined RBI in 14
January 1957 till 28 February 1957.
After Mr. K. G. Ambegaonkar Mr. H. V. R.
Iyengar (ICS), joined RBI in 1 March
1957 to 28 February 1962.
7. After Mr. I.G. Patel Mr. Manmohan sigh who is an Indian
economist and great politician, joined RBI (16 September
1982 to 14 January 1985), who later became our prime
minister in 2004 and served India till 2014.
C. Rangarajan (22 December 1992 to 21 November 1997)
Bimal Jalan (22 November 19976 to September 2003) had a huge impact on RBI operation.
After Manmohan Singh Mr. Amitav Ghosh joined RBI who is an Indian banker. He served
for 20 days from 15 January to 4 February 1985, as the 16th governor of the RBI.
After Mr. Amitav Ghosh Mr. R. N. Malhotra
joined RBI in 4 February 1985 till 22
December 1990
Mr. S. Venkitaramanan who is IAS joined
RBI in 22 December 1990 till 21 December
1992
8. RBI Recent Governors
Mr. Duvvuri Subbarao
(from 5 September 2008, with
an extension in 2011 till 4
September 2013)
Dr. Yaga Venugopal
Reddy (from 6
September 2003 until 5
September 2008.
9. Mr. Raghuram Rajan
(4 September 2013 to 4
September 2016)
Mr. Urjit Patel (from 4
September 2013 till date
10. Regulations of banking system
Manager of foreign reserve
Formulate monetary policy
Role of RBI
Clearing house functions
Inflation control
Banker to bank
Development role
Issue of currency
11. Functions of RBI
1
• It has to keep in forms of gold and foreign securities as per statutory rules against
notes
2
• Issues new currency and destroys currency and coins not fit for circulation
3
• To ensure adequate quantity of supplies of currency notes and coins of good
quality
4
• Issue of Currency & coins issued
5
• To establish financial institutions of national importance, for e.g:NABARD,IDBI
etc
6
• Performs a wide range of promotional functions to support national objectives
7
• To develop the quality of banking system in India
8
• Developmental Role
12. Role of RBI as a Monetary Authority
It Performs all banking function for the central and the state
governments and also acts as their banker excepting that of Jammu and
Kashmir. It makes loans and advances to the States and local authorities.
It acts as adviser to the Government on all monetary and banking
matters. Banker to the Government
13. Role of RBI as a Banker’s Bank
It issues guidelines and directives for
the commercial banks. Collection
and publication of data.RBI has
invited applications from more
banks for direct import of gold to
curb illegal trade in gold and
increase competition in the market.
The Reserve Bank of India also
regulates the trade of gold Currently
17 Indian banks are involved in the
trade of gold in India.
14. Role of RBI as a Money Regulator
RBI controls the supply of money in the economy by its control
over interest rates in order to maintain price stability and
achieve high economic growth using Monetary Policy.
Main Aim of Monetary Policy is to
Stabilize exchange rate
Maintain Healthy Balance
of Payment
Attain financial stability
Control inflation
Strengthen Banking System
15. Role of RBI as Issuer of Currency
Every Note issued by RBI has it’s name
imprinted on the top along with signature of
governor below promissory clause. It is the sole
authority in India to issue Currency. The
objectives are to issue bank notes and giving
public adequate supply of the same, to maintain
the currency and credit system of the country to
utilize it in its best advantage, and to maintain the
reserves. The bank issues and exchanges
currency notes and coins and destroys the same
when they are not fit for circulation.
16. Role of RBI as issuer of license
Every Bank has to obtain a Banking License from RBI to conduct banking
business in India (As per Sec 22 of Banking regulation Act). Various
Banks have been given the license like: Universal Banks Payments Bank
Small Finance Banks, IDFC Vodafone M- pesa Equitas Holdings, Bandhan
Bank Fino PayTech Utkarsh Micro Finance etc.
17. Quantitative Measures of Credit Control
Under Monetary Policy
Bank Rate :
Rate at
which RBI
discounts
bills of
commercial
banks.
Cash
Reserve
Ratio
(CRR) :
Portion of
Deposit
which
commercial
banks have
to keep
with RBI in
the form of
Cash
Reserves
Statutory
Liquidity
Rate (SLR):
Portion of
Total
Deposit
which
commercial
banks have
to keep with
RBI in the
form of
Liquid
Assets
Repo Rate :
Rate at
which
Commercial
Banks
borrow
money from
RBI
Reverse
Repo Rate :
Rate at
which RBI
borrows
money from
Commercial
Banks.
18. Example of CRR
The current CRR is 4%. If RBI cuts CRR in its next monetary policy
review then it will mean banks will be left with more money to lend or
to invest. So, more money can be released into the economy which
may spur economic growth.
19. Example of SLR
An Individual deposits say Rs 1000 in bank. Then Bank
receives Rs 1000 and has to keep some percentage of it with
RBI as SLR. If the prevailing SLR is 20% then they will have
to invest Rs 200 in Government Securities
20. CRR +SLR
reserve requirements such as SLR make banks relatively safe (as a certain
portion of their deposits are always redeemable) but at the same time restrict
their capacity to lend. To that extent, lowering of reserve requirement increases
the resources available with a bank to lend and helps control inflation and
propels growth.
21. Example of Repo Rate
If repo rate is 5% , and bank takes loan of Rs 1000 from RBI , they will pay
interest of Rs 50 to RBI.
So, higher the repo rate higher the cost of short-term money and vice versa.
Higher repo rate may slowdown the growth of the economy.
If the repo rate is low then banks can charge lower interest rates on the loan
taken by us.
Current Rates of RBI
Bank Rate is 6.50%
CRR is 4%
SLR is 20%
Policy Repo Rate is 6.25%
Reverse Repo Rate is 6%
(as per 29 July 2017)
22. Impact of Repo Rate /CRR/SLR rate
The RBI's rate cuts does not necessarily mean that the borrowers benefit
immediately. The landing bank has to reduce its Base Lending rate for EMI to
decrease.
These rate cuts will not have any impact on fixed rate home loans or fixed rate
consumer loans. The rate of interest is fixed with respect to fixed loans.
The existing bank customers (who have taken loans) can see either their Loan
tenures or EMIs coming down. By default the banks reduce the loan tenure instead
of loan EMI. That means your monthly EMI installment amount remains the same.
The rate cut will make a substantial difference if the remaining loan term/tenure is
very long.
