Function of rbi

Reserve bank of India, function of Rbi.

1. By: Aditi Gaud BBA student Function of RBI

2. RESERVE BANK OF INDIA ACT, 1934 The Reserve bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The central office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central office is where the Governor sits and where policies are formulated.

3. The Reserve bank of India (RBI) is India’s central bank, which controls the issue and supply of the Indian rupees. RBI is the regulator of entire Banking in India. RBI plays an important part in the development strategy of the Government of India.

4. Function of RBI Issuer of currency Banker to the Government Banker to banker Manager of foreign exchange Control of credit Non-monetary functions

5. Issuer of Currency Design, printing and distribution. The bank issues and exchanges or destroys currency and icons not fit for circulation. The goal of ensuring an adequate supply of clean and genuine notes.

6. Banker to Government Banker to government performs merchant banking function for the central and the state governments; also acts as their banker. RBI also manages all new issues of government loans, servicing the government debt outstanding, and nurturing the market for government’s securities.

7. Banker to banker Transfer funds and settle inter bank transactions. All banks operating in the country have accounts with the Reserve Bank.

8. Manager of foreign exchanges It acts as a custodian and manages the foreign exchanges management act (FEMA) 1999. RBI buys and sells foreign currency to maintain the exchange rate of Indian rupee v/s foreign currencies like US dollars, Euro, Pound and Japanese Yen.

9. Control of credit Credit control is a major weapon of the RBI used to control demand and supply of money in the economy.

10. Non-monetary function Besides performing the traditional functions of a central bank, the R eserve Bank of I ndia also perform the following functions: - Collection and publication of data -Regulatory and supervisory -Development and promotion

11. Collection and publication of data The RBI has a separate department of statistics for collecting, compiling and disseminating statistical information and conducting research related to bank and other financial sectors of the economy including supply of money, credit banking operation and foreign exchanges.

12. Regulatory and supervisory The RBI act & the banking act have both conferred extensive powers of regulation & supervision to the RBI over commercial & cooperative banks to check malpractices & protect interest of the investors. Development and promotion The RBI has been aiding development & promoting saving & banking habits. Development of the institutional agriculture & other rural activities has been an area of focus right from its inception.