RBI And It’s
Functions
By Atharva Patil
INDEX
Introduction.
History.
Organization.
Regional offices and Subsidiaries.
Functions.
Regulation of banking system.
Role of RBI in inflation control.
Export Credit
Restrictions And Guidelines of RBI
Functions of RBI
INTRODUCTION TO RBI
❖ Established in April 1935
under the RESERVE BANK
OF INDIAN ACT 1934.
❖ Head Quarters –
MUMBAI
❖ The Reserve Bank of India is
the central banking institution of
India and controls the monetary
policy of the rupee as well as
currency reserves.
❖ Present Governor –
P Raghuram rajan.
History Of RBI
It was set up on the recommendations of Hilton Young
Commission
It was started as share-holders bank with a paid up capital
of 5 crores
Initially it was located in Kolkata
It moved to Mumbai in 1937
Initially it was privately owned
Since 1949, the RBI is fully owned by the Government of
India.
Its First governor was Sir Osborne A.Smith
The First Indian Governor was “Sir Chintaman
D.Deshmukh
YEAR IMPORTANCE
1926 The Royal Commission on Indian Currency and Finance
recommended creation of a central bank for India.
1934 The Bill was passed and received the Governor General’s assent
1935 The Reserve Bank commenced operations as India’s central bank
on April 1 as a private shareholders’ bank with a paid up capital of
rupees five crore
1942 The Reserve Bank ceased to be the currency issuing authority of
Burma (now Myanmar).
1947 The Reserve Bank stopped acting as banker to the Government of
Burma
1948 The Reserve Bank stopped rendering central banking services to
Pakistan
1949 The Government of India nationalised the Reserve Bank under the
Reserve Bank (Transfer of Public Ownership) Act, 1948
Post Hierarchy In RBI
REGIONAL OFFICE AND SUBSIDARIES
• Has 27 regional offices.
• Has five training establishments
• College of Agricultural Banking and Reserve Bank of India
Staff College – Pune.
• National Institute for Bank Management- Pune.
• Indira Gandhi Institute for Development and Research -
Mumbai.
• Institute for Development and Research in Banking
Technology (IDRBT)- Hyderabad.
SUBSIDIARIES
• Deposit Insurance and Credit Guarantee Corporation of
India(DICGC).
• Bharatiya Reserve Bank Note Mudran Private Limited
(BRBNMPL).
Regional
offices of RBI
ROLE OF RBI IN INFLATION CONTROL
• Inflation arises when the demand increases and there is a
shortage of supply There are two policies in the hands of the
RBI.
• Monetary Policy: It includes the interest rates. When the bank
increases the interest rates than there is reduction in the
borrowers and people try to save more as the rate of interest
has increased.
• Fiscal Policy: It is related to direct taxes and government
spending. When direct taxes increased and government
spending increased than the disposable Income of the people
reduces and hence the demand reduces.
Export Credit
• Recognising the important role of
exports in maintaining the
viability of external sector and in
generating employment, the
Reserve Bank had sought to
ensure adequate availability of
concessional bank credit to
exporters.
• It took the lead role in setting up
the Export Import Bank of India
(EXIM Bank) in January 1982.
Restrictions and Guidelines of RBI
Bank Rate : It’s the interest rate that is charged by a country’s
central bank on loans and advances to control money supply in
the economy and the banking sector.
The present bank rate is 8.75%
Repo Rate: Whenever the banks have any shortage of funds
they can borrow it from the central bank. Repo rate is the rate
at which our banks borrow currency from the central bank.A
reduction in the repo rate will help banks to get Money at a
cheaper rate.The present repo rate is 7.75 %
FUNCTIONS OF RBI
• Financial supervision.
• Monetary management.
• Issue of currency.
• Banker to government.
• Banker to bank.
• Formulate monetary policy.
• Financial regulation and management.
• Manager of foreign exchange.
• Development role.
THANK YOU
