DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name Staff Member : P. BADARINARAYANA
Designation : Sr. Lecturer
Branch : DCCP
Institute : Govt. Polytechnic, NELLORE
Year/Semester : VI Semester
Subject : BANKING
Sub. Code : CCP-604(B)
Topic : Reserve Bank of India
Duration : 50 Mts.
Sub Topic : Obligations of scheduled banks to

Reserve Bank of India

Teaching Aids : Animations
CCP604(B)50 1
Objective :

On completion of this period, you would be

able to
 Comprehend the obligations of Scheduled banks
to Reserve Bank of India.

CCP604(B)50 2
Introduction

In the last lesson we have seen

 Some of the obligations of the Scheduled banks
to the Reserve Bank of India.
 Today we will see some more obligations of
Scheduled Banks to Reserve Bank of India.

CCP604(B)50 3
OBLIGATIONS OF SCHEDULED
BANKS TO RESERVE BANK OF
INDIA (2)

CCP604(B)50 4
(4) On site inspection of Banks:

The inspecting officers of RBI concentrate on core

assessments based on
 Capital adequacy,
 Asset quality
 Management
 Earnings appraisal
 Liquidity and Systems & controls
 (CAMELS)
CCP604(B)50 5
(5) Consolidated Supervision:

 Supervision at consolidated level for banks

having subsidiaries have been introduced
 Under which banks are expected to submit
 Half-yearly consolidated prudential returns and
 Annual consolidated financial statements
including
 Consolidated balance sheets and profits and loss
accounts.

CCP604(B)50 6
(6) Control over methods of operation

 The Act confers wide powers on the RBI for

ensuring that banks do not fritter away funds in
improper investments and injudicious advances.
 Banks are prohibited from engaging in trading
activities, except in realisation of the security given
to or held by them, or in connection with bills of
exchange.

CCP604(B)50 7
(7) Audit of Annual Accounts:

 Banks are required to close their books of account

every year as on 31st March, and

 Prepare a balance sheet and profit and loss

account as prescribed in the Third Schedule to the
Banking Regulation Act. With the prior approval of
the RBI, the accounts have to be audited.

CCP604(B)50 8
Summary :

Today we have seen the Obligations of

scheduled banks to Reserve Bank of India
such as
 On site inspection of banks
 Consolidated supervision
 Control over methods of operation

CCP604(B)50 9