RESERVE BANK OF INDIA

CH R S CH MURTHY
M.Com, MBA(HR),MBA(FN), (Ph.D)
Asst. Professor, SMS, SNIST.
INTRODUCTION
It is the apex bank of India.
Started functioning from 1st April 1935.
RBI plays an important part in the development
strategy of the government.
Its headquarter is in Mumbai.
It has 22 branch offices at most state
capitals and at a few major cities in India
Present governor Urgit Patel
HISTORY
It was set up on the recommendations of the Hilton
Young Commission
It was started as share-holders bank with a paid up
capital of 5 crores.
Initially it was privately owned till Jan 1949 after
which it became state-owed institution under RBI act
Initially it was located in Kolkata. It moved to Mumbai
in 1937.
YEAR IMPORTANCE
HISTORY
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 Generals
assent
1935 The Reserve Bank commenced operations as Indias 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
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 MAIN FUNCTION OF
RESERVE BANK OF INDIA
MONETARY AUTHORITY
It formulates, implements and monitors the monetary
policy.
to ensure an adequate flow of credit to productive
sectors
ISSUER OF CURRENCY
issues and exchanges or destroys currencies.
the goal of ensuring an adequate supply of clean and
genuine notes.
DEBT MANAGER TO GOVERNMENT
Managing the governments banking transactions
maintains its accounts, receives money into and makes
payments out of these accounts.
BANKER TO BANKS
Transfer funds and settle inter-bank transactions.
All banks operating in the country have accounts with
the Reserve Bank.
MANAGER OF FOREIGN EXCHANGE
plays a key role in the regulation and development of
the foreign exchange market
Main 3 function
Regulating transactions related to the external sector .
Ensuring smooth conduct
Managing the foreign currency assets and gold
DEVELOPMENTAL ROLE
To develop the quality of banking system in India.
Performs a wide range of promotional functions to
support national objectives.
To establish financial institutions of national
importance
Deposit Insurance and Credit Guarantee Corporation
(1962)
Unit Trust of India (1964)
Industrial Development Bank of India (1964)
NABARD (1982)
National Housing Bank (1989)
HOW THEY FUNCTION
Central board- the reserve banks affairs are governed
by a central board of directors.
Constitution:
Official Directors
Non-Official Directors
Local board-to represent territorial and economic
interests of local cooperative and indigenous banks.
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).