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Sunday, 6 August 2017

Important Notes : Reserve Bank Of India

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Important Notes : Reserve Bank Of India

Reserve Bank of India

The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934

The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.

Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.

Central Board of RBI

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

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

 Non-Official Directors

  • Nominated by Government: ten Directors from various fields and two government Officials
Others: four Directors - one each from four local boards

Governor of RBI: Dr. Urjit R. Patel

Local Boards

  • One each of the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi
  • Consist of five members each, appointed by the Central Government for a term of four years

Functions of Local Boards: To advise the Central Board on local matters and to represent territorial and economic interests of local cooperative and indigenous banks; to perform such other functions as delegated by Central Board from time to time. 

Functions of RBI

  • Monetary Authority: 
  •  Formulates, implements and monitors the monetary policy. 
  •  Objective: maintaining price stability while keeping in mind the objective of growth.
  • 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 public. 

  •   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 exchange market in India.
  •  The 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 currency notes and coins and in good quality. 
  • Developmental role 
  • Performs a wide range of promotional functions to support national objectives.
  •  Related Functions 
  • Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker. 
  • Banker to banks: maintains banking accounts of all scheduled banks. 

RBI has 19 regional offices, most of them in state capitals and 9 Sub-offices and 2 other offices. 

Fully owned Subsidiaries

  • Deposit Insurance and Credit Guarantee Corporation of India(DICGC)
  • Bharatiya Reserve Bank Note Mudran Private Limited(BRBNMPL)
  • National Housing Bank(NHB) 

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