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R.B.

I
Reserve Bank Of India

Project by:
Jijo Mathew
Establishment
• Established on 1st April 1935 in
accordance with the provisions
of the RBI Act 1934 on the basis
of recommendations of the
Hilton Young Commission.
• RBI Central office was in Kolkata,
until it was
moved to Mumbai in 1937. RBI
has 22 regional
offices.
• Originally privately owned, but
RBI : Governing Body
• RBI’s affairs are governed by a
Central Board of Directors
appointed by the GOI.
Central Board of Directors

Official Directors
Non-Official Directors
- Full time directors -
10 directors from
- Governor various
fields
- 4 Deputy governors -1
Main Functions
The Reserve Bank of India Act
of 1934 entrust all the important
functions of a central bank to the
RBI.
Monitory Authority :
• RBI formulates, implements &
supervises the monitory policy of
the country to maintain price
stability & ensure adequate flow
of credit.
• RBI is the controller of credit i.e.
Functions…
Regulator & Supervisor of the
financial system :
• Provides broad parameters for
banking operations within which
the country’s banking & financial
system functions.
• For supervising financial system,
RBI formed the Board of
Financial Supervision (BFS) in
1994.
• BFS mainly supervises
commercial banks, FIs & NBFCs.
Functions…
Managing Foreign Exchange :
• Manages the foreign exchange of
the country i.e. maintains the
exchange rate of Rupee against
other currencies.
• RBI also acts as the custodian of
India’s reserve of international
currencies.
• Aim is to facilitate external trade
& payments and promote orderly
development & maintenance of
Functions…
Issuer of currency :
• Under section 22 of the RBI Act,
the bank has the sole right to
issue bank notes of all
denominations.
• Issues & exchanges or destroys
currency & coins not fit for
circulation.
• RBI has a separate Issue Dept.
which is entrusted with the issue
of currency notes.
Functions…
Banker to government :
• Acts as a government banker,
agent & adviser for the central
bank as well as for all state
govts. (except Jammu &
Kashmir)
• RBI has to keep cash balances of
the govt. as deposits, receive
and make payments on behalf of
the govt.
• It also provides loans and
Functions…
Banker’s bank & lender of last
resorts :
• All scheduled banks have to
maintain cash reserves i.e CRR
equal to 3% of their aggregate
deposit liabilities.
• The schedule banks can borrow
money from RBI on the basis of
the eligible securities in times of
need & urgency.
Functions…
Promotional functions :
• RBI has directly or indirectly set
up financial institutions like
Deposit Insurance Corporation,
UTI, IDBI, Agricultural Refinance
Corporation of India, Co-
operative credit movements, etc.
• This was with a view of
promoting saving habits,
eliminating money lenders,
mobilizing savings, providing
industrial & agricultural loans.
Conclusion
• All the functions of RBI,
monitory, non monitory,
supervisory or promotional are
equally significant in context of
the Indian economy.
• Under the Banking Regulation
Act, RBI has been given a wide
range of powers.
• Under the supervision &
inspection of RBI, the working of
banks has greatly improved.
THANK YOU