1. RESERVE BANK OF INDIA :
RESERVE BANK OF INDIA Powered By- : Jyoti Prasad Manoj Singh Jyoti Shankar
Introduction :
Introduction It is the Central Bank of India Established in 1 April 1935 under the
RESERVE BANK OF INDIA ACT Its head quarters Is in Mumbai (Maharashtra). Its
present governor is Duvvuri Subbarao. It has 22 regional offices, most of them in
State capitals Website: http://www.rbi.org.in
Breif History (1 of 2) :
Breif History (1 of 2) 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 located in Kolkata. It moved to Mumbai in 1937. Initially it was privately
owned.
Breif History (2 of 2) :
Breif History (2 of 2) Since nationalization in 1949, the Reserve Bank is fully owned
by the Government of India. Its First governor was Sir Osborne A. SmithApril 1,
1935 to June 30, 1937 The first Indian Governor was “Sir Chintaman D.Deshmukh”
(August 11, 1943 to June 30, 1949) On June 27, 2006, the Union Government of
India reconstituted the Central Board of Directors of the Reserve Bank of India (RBI)
with 13 members, including Azim Premji and Kumar Mangalam Birla
Governors (1 of 2) :
Governors (1 of 2) Sir Osborne A. SmithApril 1, 1935 to June 30, 1937 Sir
Chintaman D.Deshmukh August 11, 1943 to June 30, 1949 INDIAN
Governors (2 of 2) :
Governors (2 of 2) Dr.Y.V.Reddy September 6, 2003 to September 5, 2008 Dr. D.
Subbarao September 5, 2008 onwards
Preamble :
Preamble The Preamble of the Reserve Bank of India describes the basic functions
of the Reserve Bank as :- "...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."
Organization of RBI :
Organization of RBI Central Board Local Board
Central Board (1 of 2) :
Central Board (1 of 2) The Reserve Bank's affairs are governed by a central board of
directors. The board is appointed by the Government of India as per 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

2. Central Board (2 of 2) :
Central Board (2 of 2) Non-Official Directors Nominated by Government: ten
Directors from various fields and one government Official Others: four Directors -
one each from four local boards Functions : General superintendence and direction
of the Bank's affairs
RBI Headquarters' Delhi entrance with the Yakshini Sculpture depicting ‘Prosperity
through Agriculture’ :
RBI Headquarters' Delhi entrance with the Yakshini Sculpture depicting „Prosperity
through Agriculture‟
Local Board (1 of 2) :
Local Board (1 of 2) One each for the four regions of the country in Mumbai,
Calcutta, Chennai and New Delhi Membership: Consist of five members each
Appointed by the Central Government For a term of four years
Local Board (2 of 2) :
Local Board (2 of 2) Functions : 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 :
Functions of RBI Monetary Authority Regulator & Supervisor of Financial System
Manager of Foreign Exchange Issuer of Currency Developmental Role
Formulate Monetary policy :
Formulate Monetary policy Objective:Maintain price stability and ensuring adequate
flow of credit in the economy. What R.B.I does. It formulates, implements and
monitors the monetary policy. Intruments: qualitative & quantitative.
Quantitative Measures :
Quantitative Measures BANK RATE also called discount rate.it also includes repo
rate. OPEN MARKET OPERATIONS buying and selling of government securities.
VARIABLE RESERVE RATIO it includes C.R.R and S.L.R
Qualitative measures :
Qualitative measures Margin Requirements Moral Suasion Rationing of Credit
Regulate & Supervise the Financial System :
Regulate & Supervise the Financial System Objective: To Maintain Public
confidence in the system, protect depositor‟s interest & provide cost effective
banking services to the public. What R.B.I does….. Prescribes broad parameters of
banking operations within which the country's banking and financial system

3. functions. The Reserve Bank of India performs this function under the guidance of
the Board for Financial Supervision (BFS). Lender of last resort
Manager of Foreign Exchange :
Manager of Foreign Exchange Objective:To facilitate external trade and payment
and promote orderly development and maintenance of foreign exchange market in
India. What R.B.I does….. It acts as a custodian and Manages the Foreign
Exchange Management Act, 1999. RBI buys and sells foreign currency to maintain
the exchange rate of Indian Rupee v/s foreign currencies like the US Dollar, Euro,
Pound sterling and Japanese yen. Dollar Deposits - LIBOR
Issue of Currency :
Issue of Currency Objective:To ensure adequate quantity of supplies of currency
notes and coins of good quality. What R.B.I does….. Issues new currency and
destroys currency and coins not fit for circulation. It has to keep in forms of gold and
foreign securities as per statutory rules against notes & coins issued.
Developmental Role :
Developmental Role Objective : To develop the quality of banking system in india.
What R.B.I does…… Performs a wide range of promotional functions to support
national objectives. To establish financial institutions of national importance, for e.g:
NABARD,IDBI etc.
Subsidiaries :
Subsidiaries Fully owned: National Housing Bank(NHB), Deposit Insurance and
Credit Guarantee Corporation of India(DICGC), Bharatiya Reserve Bank Note
Mudran Private Limited(BRBNMPL) Major stakes: 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. R.B.I had also set up some
trainning institutions.
Related Functions (1of 2) :
Related Functions (1of 2) Banker to the Government: Performs all banking function
for the central and the state governments and also acts as their banker. Banker to
banks: maintains banking accounts of all scheduled banks. RBI also regulates the
opening /installation of ATM Fresh currency notes for ATMs are supplied by RBI
RBI regulates the opening of branches by banks. It ensures that all the N.B.F.S
follow the Know Your Customer guidelines.
Related Functions (2 of 2) :
Related Functions (2 of 2) The Reserve Bank of India also regulates the trade of
gold. Currently 17 Indian banks are involved in the trade of gold in India. RBI has
invited applications from more banks for direct import of gold to curb illegal trade in
gold and increase competition in the market. Collection and publication of data. It
issues guidelines and directives for the commercial banks

4. Role of RBI in Economic Development :
Role of RBI in Economic Development Development of banking system
Development of financial institutions Development of backward areas Economic
stability Economic growth Proper interest rate structure Miscellaneous
Narasimham Committee (1991) (1 of 2) :
Narasimham Committee (1991) (1 of 2) High Level Committee-‟Mr
M.Narasimham‟(Chairman) Submitted Report in Nov. 1991 Basic Approach: Greater
market orientation would strengthen the financial system & thus improve its
efficiency. The solvency, health & efficiency of the institutions should be central to
effective financial reforms.
Narasimham Committee (1991) (2 of 2) :
Narasimham Committee (1991) (2 of 2) On Directed Investments-(SLR & CRR) On
Directed Credit Programmes On the Structure of Interest Rates On Structural
Reorganization of the Banking Structure
Banking Sector Reforms (1992-2005) (1 of 2) :
Banking Sector Reforms (1992-2005) (1 of 2) Statutory Liquidity Ratio (SLR) Cash
Reserve Ratio (CRR) Interest Rate slabs Prudential Norms Capital Adequacy Norms
Freedom of operation Supervision of Commercial Banks Recovery of Debts
Slide 31:
Thank you
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