Functions of Reserve Bank of India

1. RESERVE BANK OF INDIA
Prepared by :
NITISH KUMAR ARYA,
RBI Young Scholar 2010-11
Under the guidance of
Shree SUNDAR MURTHI
Deputy General Manager
Issue department, RBI Nagpur.

2. Introduction
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ContentsContents
Publication

3. INTRODUCTION
It is the central bank of India.
Established on 1 April 1935 under the
RESERVE BANK OF INDIA ACT, 1934.
Its headquarter is in
Mumbai(Maharashtra).
Its present governor is Dr. D. Subbarao.
website: www.rbi.org.in

4. OFFICES & BRANCHES
• Central Office,
Mumbai.
•Four Regional offices
(Mumbai, Delhi,
Chennai, Kolkata)
•24 Sub
offices/Branches
[The Reserve Bank of India
(RBI) opened its sub-office at
Agartala on 18th May.]
•RBI have Offices in 22
States.

5. RBI LOGO
The image is used to identify the organization
Reserve Bank of India, a subject of public
interest

6. RBI central office

First RBI Building 1935,
Kolkata
RBI Central Office Building,
Mumbai

7. RBI ORGANAISATION STRUCTURE

8. Central Board of Directors by the Numbers
Official Directors

�
1 Governor

�
4 Deputy Governors, at a maximum
Non-Official Directors

�
4 directors—nominated by the Central
Government to represent
each local board

�
10 directors nominated by the Central
Government with expertise
in various segments of the economy

�
1 representative of the Central Government

�
6 meetings—at a minimum—each year

�
1 meeting—at a minimum—each quarter

9. BRIEF HISTORY (1/2)
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 Corers.
Initially it was locates in Kolkata.
It moved in Mumbai in 1937.
Initially it was private owned.

10. BRIEF HISTORY (2/2)
Since nationalisation in 1949,
the reserve bank is fully
owned by GOVERNMENT OF
INDIA.
Its first governor was SIR.
OSBORNE A. SMITH April
1,1935 to June 30, 1937.
The first Indian governor was
“ SIR CHINTAMAN D.
DESHMUKH”, (August11,1943
to June30,1949 ).
RBI’s first governor
Sir Osborne A. Smith
April 1, 1935 to June 30, 1937
First Indian governor
SIR C. D. DESHMUKH”,
August11,1943 to June30,1949

11. 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 the monetary stability in India and
generally to operate the currency and credit
system of the country to its advantages”.

12. Issuer of CurrencyBankers to GovernmentManager Of Foreign ExchangeMonetary AuthorityBanker to Banks
Regulator And Supervisor Of Financial SystemDevelopmental Role
FUNCTIONS OF RBI
Regulator and supervisor of payment and settlement systems

13. FORMULATE MONETRY POLICY
Objectives: Maintain price stability,
Ensuring adequate flow of credit in the
economy & Financial stability.
what RBI does……
It formulates, implements and monitors of
the monetary policy.
Instruments: Direct & Indirect
instruments.

14. Direct Instruments
CRR

15. Indirect Instruments
Liquidity Adjustment
Repo/Reverse Repo Rate
Open Market Operations (OMO)
Bank Rate (BR
Market Stabilisation Scheme (MSS)

16. Banker and Debt Manager to
Governments
Maintains Central Govt.’s
accounts, receives money
into and makes payments
out of these accounts.
Facilitates transfer of
Govt. funds.
Banker to State
Governments based on
agreement.
Manages the
governments’ domestic
debt.
Develops market for govt.
securities.
Banker to central government

17. Issuer of Currency
Objective: To ensure adequate
quantity of supplies of currency
notes and coins of good quality.
What RBI 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 rules against
notes & coins issued.

18. Presses
RBI Offices
Public
Chest branches
NOTES
4 Mints
4 mint-linked RBI Offices
Chest branches & RBI
Offices
Public
COINS
Flow of Notes & Coins

19. Banker to Banks
Maintains banking accounts of all scheduled banks.

20. Manager of Foreign Exchange
Objective: to facilities external trade and payment and
promote orderly development and maintenance of foreign
exchange market in India.
What RBI does…….
It acts as a custodian and manages the foreign exchange.
RBI buys and sells foreign currencies to maintain the
exchange ate of Indian rupee v/s foreign currencies like
that us dollar, euro, pound sterling and Japanese yen.
Managing the foreign currency assets and gold reserves of
the country.

21. Regulate & supervise the
financial system
Objective: To maintain public confidence in the
system, protect depositor interest & provide cost
effective banking service to the public.
What RBI does…..
Prescribes broad parameters of banking
operations within which the Country's banking &
financials System functions.
The RBI performs this function under the guidance
board for financial supervision.

22. 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 system in country.
OUR TOOLS :

Retail payment system – NEFT , ECS, EFT
Large value system – RTGS, Security Settlement system,
foreign Exchange Clearing,
Department of payment and settlement system.

23. DEVELOPMENTAL ROLE

Objective: to develop the quality of
banking system in India.
What RBI does…..
 Performs a wide range of promotional
function to support national objectives.
 To establish financial institutions of national
importance, for e.g. : UTI, NABARD, IDBI,
IGIDR etc.

24. Subsidiaries
NHBDICGBRBNMPL
NABARD

25. RBI had also set up some training institutions
Zonal training center

26. Financial Inclusion and Literacy
RBI Young Scholar
Scheme.
Comic books on financial
matters, conducting quiz
program.
Outreach programs in
villages.
Advertisement.
Films on features of
genuine currency notes.

27. Publications of RBI
ANNUAL
-Annual report
-Trade and progress of banking in India
-Report on currency and finance
HALF-YEARLY
-Financial stability report
-Macroeconomic and monetary development report
-Report on foreign exchange reserves
QUARTERLY
-Macroeconomic and monetary development
MONTHLY
WEEKLY
-Weekly statistical supplement-extract
-Weekly statistical supplement
OCCASIONAL
LECTURE

29. Prepared by :
NITISH KUMAR ARYA,
RBI Young Scholar 2010-11
Under the guidance of
Shree SUNDAR MURTHI,
Deputy General Manager
Issue department, RBI Nagpur.
Thank
you