Reserve Banking Concern Of India (Rbi)

RBI, India’s Central Bank came into beingness on 1stApril 1935 equally a someone part holders bank. Note : 1st Central Bank inwards the basis : Rick’s Bank Sweden inwards 1656. But inwards the low-cal of unctions, Bank of England is the 1st Central Bank 1694.

Functions of RBI : 

  • Monopoly of Note issue
  • Banker, Adviser too Agent to the Govt. of India
  • Banker to Banks
  • Custodian of Foreign telephone substitution too gold.
  • Re-discounts bills of telephone substitution too hundis.
  • Lender of terminal Resort
  • Maintains stability of unusual value of Rupee.
  • Acts equally clearing house
  • Credit control

Here are merely about of import points to retrieve close RBI :

  • RBI’s key component division is inwards Mumbai.
  • RBI has 22 regional offices.
  • It was nationalized on 1st Jan 1949.
  • It prints Currency inwards xv Languages.
  • Its predecessor was Imperial Bank of Bharat (1921).
  • RBI came into beingness on the recommendation  of Hilton Young (Royal) committee equally per RBI human action 1934.
  • It is the fellow member banking concern of Asian Clearing Union (ACU) too International Monetary Fund (International Monetary Fund).
  • RBI has Board of Directors alongside 21 (Governor too iv Deputy Governors etc)
  • The nowadays Governor of RBI is Raghuram Rajan.
    • Deputy Governors :
      • Urjit Patel – 14.01.2013 onwards 
      • H. R. Khan – 04.07.2011 onwards (Re-elected)
      • R. Gandhi – 03.04.2014 onwards
      • S. S. Mundra – 30.07.2014 onwards
    • Currency notes are issued past times RBI nether “Minimum Reserve System 1957” alongside backing of Rs. 200 Cr Reserve (Gold : Rs. 115 Cr + Foreign Securities Rs. 85 Cr)
    • RBI Invests unusual telephone substitution reserves inwards multi-currency, multi-market portfolios such equally securities, other key banks too Bank of International Settlements (BIS) too deposits inwards unusual commercial banks. The yield on such investments is low.
    • RBI does non pay involvement on Govt. deposits alongside it.
    • The next monetary instruments are inwards the hands of RBI to command credit too to convey economical stability inwards the economic scheme :
      • Bank Rate : Rate of rediscount at which the RBI discounts the get-go course of teaching bills of telephone substitution brought past times the banks. 
      • Repo Rate : Injection of liquidity past times the RBI is termed equally ” Repo Rate” . This was introduced inwards Dec. 1992 too Reverse Repo Rate inwards Nov. 1996. RBI buys Govt. Securities for a curt menstruum commonly a fortnight, alongside an understanding to sell it later. Thus repo charge per unit of measurement is a short-term coin marketplace musical instrument to stabilize curt term liquidity inwards the economy.
      • Reverse Repo Rate 
        • Repo Rate is the charge per unit of measurement at which the RBI lends to commercial banks where equally the Reverse Repo Rate is the charge per unit of measurement at which the RBI borrows from the commercial banks against securities for a really curt period. 
        • Repo too Reverse Repo rates are used equally policy instruments for day-to-day liquidity management nether the liquidity adjustment facility.
      • Cash Reserve Ratio (CRR) : It refers to the per centum of cyberspace need too fourth dimension deposits which the scheduled commercial banks select to proceed alongside RBI at nothing involvement Rate equally per RBI human action 1934.
      • Statutory Liquidity Ratio (SLR) : It refers to the per centum of cyberspace need too fourth dimension deposits which the scheduled commercial banks select to proceed alongside themselves. i.e. past times purchasing Govt. Securities or inwards the cast of cash or aureate equally per Banking Regulation Act 1949, Sec 24.
        • SLR is a machinery used past times Commercial Banks for providing credit to the Govt. 
      • Open marketplace operations : RBI buys or sells Govt. Bonds inwards the minute Ratio.
    • RBI Amendment Bill 2005 provides flexibility to RBI inwards fixing the CRR too SLR.
    • Though RBI is responsible for the security too stability of the Banking sector, it is non legally independent.

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