Reserve Bank Of India

 To regulate the issue of bank notes.

 To maintain reserves with a view to securing
monetary stability.
 To operate the credit & currency system of
the country.
Board of RBI
 Bank affair’s are governed by Central Board
of Directors
 Central Board consists of Official and Non-
Official appointed by Govt. of India for a
period of four years.
 Official Directors include Governor and not
more than 4 Deputy Governor.
 RBI having four local boards in 4 regions to
represent territorial and economic interest of
local co-operative & indigenous banks.
Legal Framework

 Umbrella Acts which form the basis of its very

foundation.
 Acts which govern the specific function of
apex body.
 Acts which govern the Banking operation.
 Acts which govern the individual institutions.
Main Functions of Reserve Bank
of India
 Maintenance of Price Level.
 Regulator & Supervisor of the financial
system.
 Manager of Foreign Exchange.
 Issuance & Replacement of Currency.
Functions of Various
Departments of RBI
 Urban Banks Department: RBI regulates
the interest rates on deposits & advances,
also prescribing min reserves & liabilities to
be maintained. Also refinance facilities to
state co-operative banks.
 Rural Planning & Credit Department:
Facilitating credit to rural, agriculture & small
scale industries, Policy on priority sector
lending, support to NABARD etc.
Foreign Exchange
Department:
 Timely realization of export proceeds and
reviews
 Licensing banks to deal in foreign exchange,
collecting data related to forex transactions
from authorized dealers on daily basis for
exchange rate management.
 Also laying down policy guidelines for risk
management to forex transactions in bank
Department of Banking
Supervision
 Undertaking scheduled and on-site
inspections of banks
 Determining the criteria for the appointment
of statutory auditors and assessing audit
performance and disclosure standards.
 Dealing with financial sector frauds and
attending the complaints received against
banks and FI’s from public, banks &
Government.
Department of Banking
Operations & Development
 To promote & foster a sound & competitive
banking system.
 Laying down regulations relating to capital
adequacy, asset classification, provision for
loan, investment valuation, accounting &
disclosure standards and risk management
systems.
 Licensing of new banks, expansion of foreign
and domestic banks, approval for setting up
of subsidiaries.
Functions of Various
Departments of RBI
 Department of Information Technology:
Computerization in RBI
 Legal Department: To tender legal advice on
various matters referred by the operational
departments/offices/associates of the reserve
bank.
 Department of Govt. and Bank Accounts:
Acting as a banker to the banks,
administering public debt of both central &
state govt.
Functions of Various
Departments of RBI
 Monetary Policy Department: Preparation
of monetary budget, periodic review of
monetary, review of CRR & SLR stipulations,
analysis of data on developments in money
market.
 Internal Debt Management Dept.: Managing
Internal Debt, Auctioning the govt. Debt from
time to time, Introduction of new instruments,
smoothening the maturity structure of debt.
Department of Economic
Analysis and Policy
 Analyzing the basic issues & problems affecting
the Indian economy.
 Serves as a primary source of data & information
relating to aspects of Indian economy.
 Prepares monetary & credit aggregates, balance
of payments and external debt statistics, internal
debt & govt. finance statistics, and flow of funds &
financial savings.