RESERVE BANK OF

INDIA

Basic
Information
Established: 1st April, 1935
Headquarters :
Mumbai,
Maharashtra, India
Governor:
Duvvuri Subbarao
Alias Name: Central Bank of India
Currency:
Indian Rupee (INR)
Set up on the recommendations of HILTON
YOUNG Commission

History
1935 2013
Operations began on April 1, 1935 to respond to economic troubles
after the first world war.
Since 1949, RBI has been fully owned by the Government of India
Between 1969 and 1980 the Indian government nationalized 20
banks.
1991: India faces balance of payment crisis; pledges gold to shore
up reserves. Rupee devalued.

Structure of RBI
The Reserve Bank is wholly owned by the Government of India. The
Central Board of Directors oversees the Reserve Banks business.
Central Board of Directors
1 Governor
4 Deputy Governors, at a maximum
Non-Official Directors
4 directorsnominated by the Central Government to represent each
local board.
10 directors nominated by the Central Government with expertise in
various segments of the economy.

Main Activities of the

RBI

Monetary Authority
Issuer of Currency
Banker and Debt Manager to Government
Banker to Banks
Regulator of the Banking System
Manager of Foreign Exchange
Regulator and Supervisor of the Payment and Settlement Systems
Developmental Role

Main Activities of the RBI

--

Monetary Authority

Monetary Policy Objective:

Maintaining price stability
Ensuring adequate flow of credit to the productive sectors of the
economy to support economic growth
Financial stability
Direct Instruments:
Cash Reserve Ratio (CRR)
Statutory Liquidity Ratio
(SLR)
Refinance facilities

Indirect Instruments:
Open Market Operations
(OMO)
Repo/reverse repo rate
Bank rate

Main Activities of the RBI

--

Issuer of Currency

The Reserve Bank is the nations sole note issuing authority.

RBI has separate Issue Department to issue currency notes
.
RBI maintain Minimum Reserve in form of Gold and Foreign Exchange
Reserve of which almost 55% should be in Gold

Main Activities of the RBI

-- Banker and Debt Manager to
Government

The role as banker and debt manager to government includes several

distinct functions:
RBI is banker, agent and advisor of Central Government and all
State Governments

in India.

RBI helps the Government to float new loans and to manage

public debt.

Main Activities of the RBI

-- Banker to
As the banker Banks
to banks, RBI focus on:
Enabling smooth, swift and seamless clearing and settlement of interbank obligations.
Providing an efficient means of funds transfer for banks.
Enabling banks to maintain their accounts with us for purpose of
statutory reserve requirements and maintain transaction balances.
Acting as lender of the last resort.

Tools:

1.Deposit Account Department

2.Remittance facilities
3.Lender of the last resort
4.Loans and advances

Main Activities of the RBI

-- Regulator of the Banking
The Reserve Bank
regulates and supervises the nations financial
System
system
Commercial banks and all-India development financial institutions
Urban co-operative banks
Regional Rural Banks (RRB), District Central Cooperative Banks and
State Co-operative Bank
Non-Banking Financial Companies (NBFC)

RBI handles a range of activities:

1.Licensing
2.Prescribing capital requirements
3.Monitoring governance
4.Prescribing lending to certain priority sectors of the economy

Main Activities of the RBI

-- Manager of Foreign Exchange
The Reserve Bank plays a key role in the regulation and development of
the foreign exchange market and assumes three broad roles relating to
foreign exchange:
RBI is responsible to maintain official rate of exchange as
according to the terms of I.M.F.

RBI reserves the international currency.

RBI observes relationship of Indian Currency with other

International currency.

Main Activities of the RBI

-- Regulator and Supervisor of Payment and
Settlement Systems
The Payment and Settlement Systems Act of 2007 (PSS Act) gives the
Reserve Bank oversight authority, including regulation and supervision,
for the payment and settlement systems in the country. In this role, we
focus on the development and functioning of safe, secure and efficient
payment and settlement mechanisms.

Tools:

Retail payment systems

Large value systems
Department of Payment and Settlement Systems
Department of Information Technology

Main Activities of the RBI

-- Developmental Role
This role is, perhaps, the most unheralded aspect of our activities, yet it
remains among the most critical. This includes ensuring that credit is
available to the productive sectors of the economy, establishing
institutions designed to build the countrys financial infrastructure,
expanding access to affordable financial services and promoting
financial education and literacy.

Tools:

Directed credit for lending to priority sector and weaker sections

Sector specific refinance
Strengthening and supporting small local banks

Subsidiaries
The Reserve Bank of India has fully-owned four subsidiaries which include

National Housing Bank(NHB).

Deposit Insurance and Credit Guarantee Corporation of India(DICGC).
Bharatiya Reserve Bank Note Mudra Private Limited(BRBNMPL).

National Bank for Agriculture and Rural Development (NABARD

).

The Reserve Bank of India has recently divested its stake in State Bank of India
to the Government of India. RBI has also set up some training institutions.

THANKING YOU