overview of rbi

8/3/2019 Overview of Rbi

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PRESENTATION ON INTRODUCTIONOF RBI

Presented To: Presented By:

Mrs. Ekta Bargal Abhinav Kant ShrivastavAbhishek Namdeo

Amita Pal

Amit Sharma


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HISTORY

HINDUSTAN BANK

RESERVE BANK OF INDIA


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BANKS YEARS

HINDUSTAN BANK 1779

CENTRAL BANK OF INDIA 1786

BANK OF BENGAL 1809

BANK OF BOMBAY 1840


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BANK OF MADRAS 1843

Bank of Bengal, Bombay and Madras 1920

got merged

Imperial Bank of India 1921

RBI act 1934


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Reserve Bank of India (RBI) 1935

After the reserve bank of india shaped many other changes

came in the banking secto industry

SBI act 1955

SBI group with its subsidiary came 1959

into existence


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14 banks got merged in theyear..1969

means these 14 banks are converted into thenationalized

6 more banks ot merged into this in the

year1980


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Establishment :The Reserve Bank of India was established on April 1,

1935

The Central Office of the Reserve Bank was initially established in

Calcutta but was permanently moved to Mumbai in 1937.

Preamble :

To secure monetary stability with in the country

To operate the currency and credit system to the advantage ofthe country


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Manegment :

The Reserve Bank's affairs are governed by a central board of directors. Theboard is appointed by the Government of India in keeping with the ReserveBank of India Act.Appointed/nominated for a period of four years

Central Board :

Official Directors

Full-time : Governor and not more than four Deputy Governors

Non-Official Directors

Nominated by Government: ten Directors from various fields and onegovernment Official

Others: four Directors - one each from four local boards


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Local Board :

there are four local board, one each from the four regions ofthe country

consist of five members each in a board.

functions :

The local board is to advise the central board in localmatters

To represent territorial and economic interns of local

cooperatives andindigenous banks interest

To perform such other functions as deligated by the centralboard time to

time

OFFICES : The RBI has 22 regional offices most of them in state capital


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RBI-its functions

Bank of issue

Banker to government

Bankers' bank & Lender of the last resortController of credit

Custodian of foreign reserves


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Under sec 22 of the RBI ACT , the bank has the soleright to issue bankNotes of all denominations. The distribution of onerupee notes and small Coins all over the country is

undertaken by the Reserve Bank as agent of theGovernment. The Reserve Bank has a separate issuedepartment which is entrusted with the issue ofcurrency notes. The assets and liabilities of the issue

department are kept separate from those of theBanking department. Since1957, the RBI is requiredto maintain gold and foreign exchange reserves ofRs.200 crores,of which at least Rs.115 crores shouldbe in gold. The system as it exists today is known as

the minimum reserve system.

BANK OF ISSUE


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Banker to Government:

The second important function of the RBI is to act asGovernmentbanker,Agent and adviser. The Reserve Bank is

agent of centralGovernment and of all state Gov. in India exceptingthat of JammuAnd Kashmir.The Reserve Bank has the obligation totransact Gov.Business.The RBI helps the Government-both theUnion and the state To float new loans and tomanage public debt. The Bank makes ways Andmeans advances to the states and local authorities.

It acts as adviser To the Gov. on all monetary and


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BANKERS BANK AND LENDER OF THE LAST RESORT

RBI acts as the bankerbank .According to the provision ofing companies Act of 1949,every scheduled bank was requaintain with the Reserve Bank a cash balance equivalent t

s demand liabilities and 2% of its time liabilities in India .The scheduled bank can borrow from the basis of eligible securities or get financial accommodatios of need or stringency by rediscounting bills of exchange .mercial bank can always expect the RBI to come to their h

of banking crisis the Reserve Bank become not only the bbut also the lender of the last resort.


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s the controller of credit .it has the power to influences thef credit created by bank in India . It can do so throughthe Bank rate or through open market operation .Accordin

nking regulation Act of 1949, the RBI can ask any particulahe whole banking system not to lend to particular groups on the basis of certain types of securities . Since 1956, selecof credit are increasingly being used by the reserve bank .

CONTROLLER OF CREDIT


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Continue

As supreme banking authority in the country, theRBI,Therefore, has the following power:

It hold the cash reserves of all the scheduled bank.

It controls the credit operation of bank throughquantitative and qualitative controls.

It controls the banking system through the system oflicensing, inspection and calling for information.

It Act as the lender of the last resort by providingrediscount facilities to scheduled bank.


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The RBI has the responsibility to maintain the officialrate of exchange.According the RBI Act of 1934, the bank was required

to buy and sell At fixed rates any amount of sterling inlots of not less then Rs.10000.

CUSTODIAN OF FOREIGN RESERVES


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Main FunctionsMonetary Authority: Formulates, implements and monitors the monetary policy. Objective: maintaining price stability and ensuring adequate flow of

credit to productivesectors.

Regulator and supervisor of the financial system:

Prescribes broad parameters of banking operations within which thecountry's banking and financial system functions.

Objective: maintain public confidence in the system, protectdepositors' interest and provide cost-effective banking services to the

public.

.


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Continue Manager of Foreign Exchange Manages the Foreign Exchange Management Act, 1999.

Objective: to facilitate external trade and payment and promote

orderly development and maintenance of foreign exchangemarket inIndia.

Issuer of currency: Issues and exchanges or destroys currency and coins not fit for

circulation.

Objective: to give the public adequate quantity of supplies of currencynotes and coins and in good quality.


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Continue..

Developmental rolePerforms a wide range of promotional functions to support

national objectives.

Related FunctionsBanker to the Government: performs merchant banking

function for the central and the state governments; alsoacts as their banker.

Banker to banks: maintains banking accounts of all

scheduled banks.


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Main Objectives O RBI The Reserve Bank of India Act, 1934 sets out the objectives: The main objective is to give the public adequate supply of currency of

good quality and to provide loans to commercial banks to maintain orimprove the GDP (Economy)

Maintaining price stability and ensuring adequate flow of credit toproductive sectors

Maintain public confidence in the system, protect depositors' interestand provide cost-effective banking services to the public

To facilitate external trade and payment and promote orderlydevelopment and maintenance of foreign exchange market in India.
http://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Commercial_bank


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SOME STEPS TAKEN BY RBI TO FULLFILL THEIR

OBJEVTIVES:

Committee on Consumer Services on Sep,1990Formation ofNarashimham Committee

recommendation of Financial Reform in India on 1991Recommendation ofJanki Raman committee on

April 30, 1992 for high level of enquiry for theirregularities in security transactionsNew departments constituted in RBI on July 6, 2005

named financial Market department

LOK SABHA approves RESERVE BANK(amendments) BILL 2005


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ContinueRBI issues Basel 2 guidelines for banks

RBIs direction to set up FLCC (financial literacy and creditcounselling centers)

Government buys RBIs entire stack in SBI on June 29,2007

RBI initiates for free inter ATM use on April, 2009

The New Environmental friendly policy of RBI

New series ofSTAR bank note issued by RBI


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Role of RBI as Promoter :Monetary and credit Policy

Development of Commercial banking system

Development of money market

Development of network in public andcooperative sector

Branch network in rural area

Setting up of development bank

Assisting in the development of other market

Encourage research activities.


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Monetary policy is one of the tools that a nationalGovernment uses to influence its economy. Using itsmonetary authority to control the supply andavailablity of money, a government attempts to

influence the overall level of economic activity inline with its political objectives. Usually this goal is"macroeconomic stability" - low unemployment, lowinflation, economic growth, and a balance of externalpayments. Monetary policy is usually administered by

a Government appointed "Central Bank", the Bank ofCanada and the Federal Reserve Bank in the UnitedStates.


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CONCLUSION


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overview of rbi

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