PRESENTATION ON INTRODUCTION OF RBI

Presented To: Presented By: Mrs. Ekta Bargal Abhinav Kant Shrivastav Abhishek Namdeo Amita Pal Amit Sharma

HISTORY
HINDUSTAN BANK

RESERVE BANK OF INDIA

BANKS HINDUSTAN BANK

CENTRAL BANK OF INDIA BANK OF BENGAL BANK OF BOMBAY

YEARS 1779 1786 1809 1840

BANK OF MADRAS Bank of Bengal, Bombay and Madras

1843 1920

got merged
Imperial Bank of India RBI act

1921 1934

Reserve Bank of India (RBI)

1935

After the reserve bank of india shaped many other changes came in the banking secto industry
SBI act SBI group with its subsidiary came

1955 1959

into existence

14 banks got merged in the

year..1969 means these 14 banks are converted into the nationalized

6 more banks ot merged into this in the

year1980

Establishment : The Reserve Bank of India was established on April 1, 1935

The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937.

Preamble : To secure monetary stability with in the country

To operate the currency and credit system to the advantage of the country

Manegment :
The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. Appointed/nominated for a period of four years Central Board : Official Directors Full-time : Governor and not more than four Deputy Governors Non-Official Directors Nominated by Government: ten Directors from various fields and one government Official Others: four Directors- one each from four local boards

Local Board : there are four local board, one each from the four regions of the country consist of five members each in a board. functions : matters The local board is to advise the central board in local

To represent territorial and economic interns of local cooperatives and indigenous banks interest To perform such other functions as deligated by the central board time to time OFFICES : The RBI has 22 regional offices most of them in state capital

RBI-its functions
Bank of issue Banker to government Bankers' bank & Lender of the last resort Controller of credit Custodian of foreign reserves

BANK OF ISSUE Under sec 22 of the RBI ACT , the bank has the sole right to issue bank Notes of all denominations. The distribution of one rupee notes and small Coins all over the country is undertaken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate issue department which is entrusted with the issue of currency notes. The assets and liabilities of the issue department are kept separate from those of the Banking department. Since1957, the RBI is required to maintain gold and foreign exchange reserves of Rs.200 crores,of which at least Rs.115 crores should be in gold. The system as it exists today is known as the minimum reserve system.

Banker to Government: The second important function of the RBI is to act as Government banker,Agent and adviser. The Reserve Bank is agent of central Government and of all state Gov. in India excepting that of Jammu And Kashmir.The Reserve Bank has the obligation to transact Gov. Business.The RBI helps the Government-both the Union and the state To float new loans and to manage public debt. The Bank makes ways And means advances to the states and local authorities. It acts as adviser To the Gov. on all monetary and

BANKERS BANK AND LENDER OF THE LAST RESORT

RBI acts as the bankerbank .According to the provision of t king companies Act of 1949,every scheduled bank was requi maintain with the Reserve Bank a cash balance equivalent to ts demand liabilities and 2% of its time liabilities in India . The scheduled bank can borrow from th he basis of eligible securities or get financial accommodation es of need or stringency by rediscounting bills of exchange .s mmercial bank can always expect the RBI to come to their he e of banking crisis the Reserve Bank become not only the ba k but also the lender of the last resort.

CONTROLLER OF CREDIT

is the controller of credit .it has the power to influences the of credit created by bank in India . It can do so through g the Bank rate or through open market operation .According anking regulation Act of 1949, the RBI can ask any particular the whole banking system not to lend to particular groups or n the basis of certain types of securities . Since 1956, select of credit are increasingly being used by the reserve bank .

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As supreme banking authority in the country, the RBI,Therefore, has the following power: It hold the cash reserves of all the scheduled bank. It controls the credit operation of bank through quantitative and qualitative controls. It controls the banking system through the system of licensing, inspection and calling for information. It Act as the lender of the last resort by providing rediscount facilities to scheduled bank.

CUSTODIAN OF FOREIGN RESERVES The RBI has the responsibility to maintain the official rate of exchange. According the RBI Act of 1934, the bank was required to buy and sell At fixed rates any amount of sterling in lots of not less then Rs.10000.

Main Functions
Monetary Authority:
Formulates, implements and monitors the monetary policy. Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.

Regulator and supervisor of the financial system:

Prescribes broad parameters of banking operations within which the country's banking and financial system functions. Objective: maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public.

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Manager of Foreign Exchange Manages the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote

orderly development and maintenance of foreign exchange market in India.

Issuer of currency: Issues and exchanges or destroys currency and coins not fit for circulation. Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.

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Developmental role Performs a wide range of promotional functions to support national objectives. Related Functions Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker. Banker to banks: maintains banking accounts of all scheduled banks.

Main Objectives O RBI

The Reserve Bank of India Act, 1934 sets out the objectives: The main objective is to give the public adequate supply of currency of good quality and to provide loans to commercial banks to maintain or improve the GDP (Economy) Maintaining price stability and ensuring adequate flow of credit to productive sectors Maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public To facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.

SOME STEPS TAKEN BY RBI TO FULLFILL THEIR OBJEVTIVES:

Committee on Consumer Services on Sep,1990 Formation of Narashimham Committee

recommendation of Financial Reform in India on 1991 Recommendation of Janki Raman committee on April 30, 1992 for high level of enquiry for the irregularities in security transactions New departments constituted in RBI on July 6, 2005 named financial Market department LOK SABHA approves RESERVE BANK (amendments) BILL 2005

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RBI issues Basel 2 guidelines for banks RBIs direction to set up FLCC (financial literacy and credit

counselling centers) Government buys RBIs entire stack in SBI on June 29, 2007 RBI initiates for free inter ATM use on April, 2009 The New Environmental friendly policy of RBI New series of STAR bank note issued by RBI

Role of RBI as Promoter :

Monetary and credit Policy Development of Commercial banking system Development of money market Development of network in public and

cooperative sector Branch network in rural area Setting up of development bank Assisting in the development of other market Encourage research activities.

 Monetary policy is one of the tools that a national

Government uses to influence its economy. Using its monetary authority to control the supply and availablity of money, a government attempts to influence the overall level of economic activity in line with its political objectives. Usually this goal is "macroeconomic stability" - low unemployment, low inflation, economic growth, and a balance of external payments. Monetary policy is usually administered by a Government appointed "Central Bank", the Bank of Canada and the Federal Reserve Bank in the United States.

CONCLUSION