RESERVE BANK OF INDIA

ORGANISATIONAL EVOLUTION

THE RESERVE BANK 1935

PREAMBLE

"...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage."

BRIEF HISTORY
It was set up on the recommendations of the HILTON YOUNG COMMISSION. It was started as shares holders bank with a paid-up capital of 5crs. It was established on 1st April 1935

Initially it was located in Kolkata It moved to Mumbai in the year 1937 Initially it was privately owned It was the 1st bank to be nationalized in 1949

It has 22 regional office, most of them in state capitals

KEY ROLES RBI

Regulator and supervisor of the financial system Manager of exchange control

Issuer of currency
Banker to the government

Banker to banks: maintains banking accounts of all scheduled banks.

EVOLUTION OF CENTRAL BANKING IN INDIA

Central banks, the world over, are products of history. They are characterised typically, by an evolutionary development rather than being programmed to undertake from the beginning what they subsequently did. Almost universally, central banks have transmigrated from mere issuers of the national currency to wardens of its value. Needless to say that central banking functions generally emanate from the context of evolving linkages and relationships within an economic system.

PART 2

REGULATION AND SUPERVISION

 PROJECTED after independence.

Mainly REGULATES financial system

Works for soundness of banking system. SOCIAL CONTROL i.e. through nationalisation.

IMPACT:
a. b. c. That it shifted from micro to macro and adopted international accounting standard. Strenghten the cooperative banks Development :introduction of information technology within a legal framework.

PART 3

Three development targets of reserve bank

Money market
Forex market Government securities Factors of hindering market in India Administered interest rate

Directed credit
Weak banking structure

FINANCIAL MARKET DEVELOPMENT IS COMPLEX AND DEPEND ON SEVERAL FACTORS LIKE Sound financial institution Favorable legal framework

Technological support
Congenial policy environment

PART 4

MONETARY FISCAL INTERFACE

Monetary-Involving Money

Fiscal-Involving Finance
Interface-To Connect

Reforms Measures
The system of issuance of ad hoc treasury bills and automatic monetisation was replaced with a system of Ways and Means Advances (WMA). An increasing proportion of the fiscal deficit of the government being financed by borrowings at market related rates of interest. There has been a reduction in preemptions of commercial banks resources from well over one-half to about a third of their resources. Thus, the mandatory component of market financing of government borrowing has decreased.

PART 5

Reserve Bank Of India

[A case of Organizational Evolution]

As per the case of organizational changes, Reserve Bank concentrate on,

1. Transparency,

2. Profit,
3. Value in global market place..

For achieving these objective Reserve Bank update it self and try to access the new growing technologies to compete with this new economical era.. In this series the followings are come..

The Reserve Bank Balance Sheet

Balance sheet or statement of financial position is a summary of, 1. financial balances. 2. a business partnership or a company.

3. Assets.
4. liabilities and ownership equity. of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.

The Reserve Bank Balance Sheet

By maintain balance sheet reserve bank achieve followings, 1. 2. 3. 4. 5. Dominance of foreign assets. Considerable downsizing of investment in Government securities. Reduction in reserve requirements. Lower rate of return on foreign currency. Exchange & interest rate on global market.

Reserve bank also try to maintain flexibility and public confidence on its policy by considering its annual report as balance sheet. In Reserve bank, for maintaining transparency two copies of a balance sheet is generated,

The Reserve Bank Balance Sheet

Followings are the screen shots of RBI balance sheets, this report publish on web on 30th June 2006.

Communication Policy
In general, the interchange of information is known as communication, in same way for achieving transparency Reserve Bank also adopt the communication policy, this policy defined by Disseminate the wide range of information regularly to public. The communication policy with three main features: 1. 2. 3. transparency. Timeliness. Credibility.

For propagation of information RBI used following method, 1. 2. Publish information on website. Publication media.

Assessment
RBI successfully continued to adapt to the changing economic environment. For this assessment RBI consider followings,
1. Time to time watch market trend and monitor numerous variable. 2. Consider quality and rates in the global and domestic economic.

3. In a time duration take feedback from market participates.

Conclusion

The reverse bank is success in achieving the twin objectives of growth with stability.

RBI gets following achievement: Monetary policy operating procedure. Managing the capital flows, ensuring evolution of competitive markets and sustaining a healthy financial system while successfully facing the challenges of globalization, the reserve bank has earned international credibility in terms of efficiency of its policies. It has achieved commendable transparency in its operation. The Reserve bank has managed to evolve constructively on a continuous basis to cope with demands for stable macroeconomic management and financial stability, while meeting the objective of economics growth and development.