Banking Awareness

Reserve Bank of India

 Banking Awareness
Reserve Bank of India

Reserve Bank of India

Reserve Bank of India is the Central Bank of India. It is a statutory body, responsible for the

printing of currency notes and managing the supply of money in the Indian Economy.

● Establishment: April 1, 1935

● Act: RBI Act 1934

● Nationalization: Jan 1, 1949

● Recommendation: Hilton Young Commission

● The Central Office of the Reserve Bank was initially established in Calcutta

but was permanently moved to Mumbai in 1937

● Local Offices: 1) Chennai 2) Delhi 3) Kolkata 4) Mumbai

● First Governor: Osborne Smith

● First Indian Governor: C. D. Deshmukh

Roles:

1) Development of Financial Institutions

2) Development of the Banking System

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Reserve Bank of India

3) Facilitating Economic Growth

4) Bringing Economic Stability

5) Promotion of Commercial and Cooperative Banking

6) Promotion of Industrial Finance

7) Preparing Interest rate Structure

8) Promotion of Differential Rate of Interest Scheme.

Functions:

1) The issuer of the currency

2) Banker’s bank

3) Bankers to the Government

4) Monetary Authority

5) Acts as a Clearing House

6) Regulator of Economy

7) Regulator of Foreign Exchange

8) Controls credit in the Economy

9) Regulator and Supervisor of Expense and Settlement Structures

10) Impartial Practices Code for Investors

11) Monitoring Non-Bank Financial organisations

12) Providing the authorization to banks and managing new branches

13) Execution of Deposit Insurance scheme.

Important Publications of RBI:

• Financial Stability Report

• Monetary Policy Report

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Reserve Bank of India

• Report on Financial Review

Structure of RBI:

Following are the important details regarding the structure of the Reserve Bank of India:

• The board of RBI follows the guidelines of the RBI Act and is appointed by the

government of India.

• The directors of RBI are either appointed or nominated for a term of four years

• The official directors include: one full-time governor and not more than four deputy

governors

• Non-official Directors: 10 directors nominated by the government from miscellaneous

sectors along with 02 government officials

• Others: 04 directors, one each from four regional boards

Subsidiaries of RBI:

● Deposit Insurance and Credit Guarantee Corporation of India (DICGC)

● Bharatiya Reserve Bank Note Mudran Pvt. Ltd (BRBNMPL)

● Reserve Bank Information Technology Pvt. Ltd (ReBIT)

● Indian Financial Technology and Allied Services (IFTAS).

● Reserve Bank Innovation Hub (RBIH)

Deposit Insurance and Credit Guarantee Corporation of India:

● Headquarters: Mumbai

● Establishment: 15 July, 1978

● Act: Deposit Insurance and Credit Guarantee Corporation Act, 1961

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Reserve Bank of India

● Branches: Chennai, Nagpur, Kolkata, New Delhi.

● Max. amount insured by DICGC: Rs. 5 lakhs

● It aims to provide insurance for deposits and guarantee credit facilities.

● It insures all bank deposits, such as savings, fixed, current, recurring etc.

● Authorized capital – 50 Crores

Bharatiya Reserve Bank Note Mudran Private Ltd. (BRBNMPL):

Establishment: Feb 3, 1995

Headquarters: Bangalore, Karnataka

Act: Companies Act, 1956

● BRBNMPL has two bank note presses in Mysore and Salboni.

o It prints bank notes for the Reserve Bank of India.

o It is to address the demand of bank notes.

● BRBNMPL supplies a major portion of bank note requirement in the country.

● The remaining requirements are met through security printing and minting

corporation of India Ltd (SPMCIL)

● Under SPMCIL, Security paper mill, Hoshangabad was established.

● Mints: Mumbai, Hyderabad, Kolkata and Noida.

● Currency Note Press: Nashik

● Bank Note Press: Dewas

Reserve Bank Information Technology Pvt. Ltd (ReBIT):

Establishment: 2016

Headquarters: Mumbai

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Reserve Bank of India

● It has been set up for its IT and cybersecurity needs and to ensure cyber resilience

of Indian banking.

● ReBITadvise, implement and manage internal or system-wide IT Projects (both

existing and new) of the Reserve Bank.

● Safeguard RBI assets by detecting and responding to cyber-threats.

Indian Financial Technology and Allied Services (IFTAS):

● It designs, deploys and provides the essential IT-related services required by the

Reserve Bank of India, banks and financial Institutions.

● Establishment: Feb 2015 by Institute for Development and Research in Banking and

Technology (IDRBT).

● It is an autonomous organization funded by the Reserve Bank of India, in pursuance

of the recommendation of the Rangarajan Committee (2009).

● It manages and operates the Financial Messaging platform that comprising of Real-

Time Gross settlement and National Electronic Funds Transfer.

● IFTAS has taken over the Indian Financial Network (INFINE) Structured Financial

Messaging System and the Indian Banking Community cloud from IDRBT.

● RBI has adopted a Minimum Reserve System for issuing/ printing currency notes.

Since 1957, it has maintained gold and foreign exchange reserves of Rs. 200Cr of

which at least Rs.115Cr should be in gold and remaining in the foreign currencies.

Reserve Bank Innovation Hub (RBIH)

Establishment: 2022

Headquarters: Bengaluru

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• The Reserve Bank Innovation Hub is a wholly owned subsidiary of the Reserve Bank

of India (RBI) as a Section 8 company under the Companies Act, 2013, with an initial

capital contribution of Rs. 100 crores to encourage and nurture financial innovation in

a sustainable manner through an institutional set-up.

• RBIH aims to develop an environment that promotes access to financial services and

products for the country's low-income people. This is in accordance with the goal of

the RBIH, which is to bring world-class innovation to India's financial sector, as well

as the underlying concept of financial inclusion.

Training Institutes of RBI:

RBI has five training establishments

• Four, namely, RBI Academy, College of Agricultural Banking, Reserve Bank of India

Staff College and College of Supervisors are part of the Reserve Bank.

• Other autonomous, such as Institute for Development and Research in Banking Technology

(IDRBT)

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