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Reserve Bank of India
Dr. Punkaj Goyal
History…
• Need felt by British Govt.
– General Bank of Bengal & Bihar (1773)
– Performance was not up to the mark.
• Establishment:
– Apr 1, 1935 (Kolkata)
– Moved to Mumbai (1937)
– Nationalized in Jan 1, 1949
Preamble
• “To regulate the issue of Bank Notes & keeping
reserves with a view to securing monetary
stability in India & generally to operate the
currency and the credit system of the country
to its advantage”.
Objectives…
• To stabilize the value of Indian Currency.
• To adopt an appropriate credit policy
according to varying needs of economy.
• To control banking system of the country.
• To lead the money market.
Management…
• Central Board
– Official & Non-Official
• Official – 1 Governor & 4 Dy. Governor
• Non Official – 10 Directors from various fields, 1 Govt.
official, all are nominated by GOI.
• Others : Four Directors – one each from four local
Banks.
• Local Board
– One each for the four regions of the country.
• Membership:
– Consist of five members each.
– Appointed by Central Government.
– For a term of Four Years.
Functions…
• Regulation of the Currency
• Banker, Adviser and Agent to the Govt.
• Custody of Cash Researve
• Custody of Exchange Researve
• Clearing House of Banks
• Controller of Credit
Credit Control…
• Objectives:
• To stabilize the domestic prices;
• To bring out stability in the Foreign Exchange Rates;
• To stop undue outflow of the gold;
• To exercise control over the deflationary and
inflationary conditions;
• To provide for the required credit demand of the
business sector;
Techniques to control the credit
• Quantitative :
– Bank Rate Policy
– Open market operations
– Variable Reserve Ratio
• Qualitative
– Regulation of Consumer Credit
– Regulation of Margin Requirement
– Rationing of the Credit
– Direct Action
– Publicity
Reserve Bank of India

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Reserve Bank of India

  • 1. Reserve Bank of India Dr. Punkaj Goyal
  • 2. History… • Need felt by British Govt. – General Bank of Bengal & Bihar (1773) – Performance was not up to the mark. • Establishment: – Apr 1, 1935 (Kolkata) – Moved to Mumbai (1937) – Nationalized in Jan 1, 1949
  • 3. Preamble • “To regulate the issue of Bank Notes & keeping reserves with a view to securing monetary stability in India & generally to operate the currency and the credit system of the country to its advantage”.
  • 4. Objectives… • To stabilize the value of Indian Currency. • To adopt an appropriate credit policy according to varying needs of economy. • To control banking system of the country. • To lead the money market.
  • 5. Management… • Central Board – Official & Non-Official • Official – 1 Governor & 4 Dy. Governor • Non Official – 10 Directors from various fields, 1 Govt. official, all are nominated by GOI. • Others : Four Directors – one each from four local Banks. • Local Board – One each for the four regions of the country. • Membership: – Consist of five members each. – Appointed by Central Government. – For a term of Four Years.
  • 6. Functions… • Regulation of the Currency • Banker, Adviser and Agent to the Govt. • Custody of Cash Researve • Custody of Exchange Researve • Clearing House of Banks • Controller of Credit
  • 7. Credit Control… • Objectives: • To stabilize the domestic prices; • To bring out stability in the Foreign Exchange Rates; • To stop undue outflow of the gold; • To exercise control over the deflationary and inflationary conditions; • To provide for the required credit demand of the business sector;
  • 8. Techniques to control the credit • Quantitative : – Bank Rate Policy – Open market operations – Variable Reserve Ratio • Qualitative – Regulation of Consumer Credit – Regulation of Margin Requirement – Rationing of the Credit – Direct Action – Publicity