RESERVE BANK OF

INDIA ACT, 1934

DINESH RAMI REDDY.M.R

PGDM 1st YEAR
Saturday, June 02, 2012 DINESH RAMI REDDY.M.R
 Established on April 1, 1935 with share capital of
Five Crore’s on recommendation of Hilton Young
Commission.
 RBI was Nationalized in Year 1949, Central Office
was initially established in Calcutta and moved to
Mumbai in 1937

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 RBI Have 20 Directors :

• The Governor : Duvvuri Subbarao

• Four Deputy Governor

• One Govt. Official from Ministry of Finance.
• Ten Nominate Director, nominated by Govt.
• Four Directors to represent Headquarters at Mumbai,
Kolkata, Chennai & New Delhi.
• Appointed/ Nominated for period of Four Years
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 Head office in Mumbai.

 24 Regional offices, most of them in

State Capital.

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

The Preamble of the Reserve Bank of India describes the
basic objectives of the Reserve Bank as“….To regulate
the issue of Bank Notes and keeping of reserves with
a view to securing monetary stability in India and
generally to operate the currency and credit system of
the country to its advantage."

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 ORGANIZATION OF THE RBI
The Reserve Bank's affairs are governed by a central
board of directors and four local boards of directors. The
central board performs the functions of general
superintendence and direction of the bank’s affairs.
  Central board: Appointed/nominated by the GOI for a
time period of four years. It includes the following;
 Official directors
 Non-official directors
 Committee of Central board
 Board for Financial Supervision(BFS)

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 ORGANIZATION OF THE RBI
 Board for Payment and Settlement system(BPSS)
 Sub - Committees of the Central Board
Local board: There are four local boards, one each for the
four regions of the country situated in Mumbai, New
Delhi, Chennai and Kolkata. The membership of each
local board consists of five members appointed by the
central govt. for a period of four years. The functions of
the local board include:
 To advise central board on local matters
 To perform such other functions as may be delegated by
the central board from time to time.
Saturday, June 02, 2012 DINESH RAMI REDDY.M.R
 DEPARTMENTS
The RBI has 26 departments focusing on policy issues in RBI’s functional areas etc.
let’s briefly know the functions of each department.
1.Customer Service Department:
In order to enhance the quality of customer service and strengthen the grievance re dressal
mechanism, the RBI constituted a new department namely CSD.
2. Department of Currency Management:
This department performs the core statutory function of note and coin issue and currency
management.
3. Urban Banks Department:
This department carries out the function of regulation and supervision of UCBs.
4. Raj bhasha Department:
Translating annual reports, news letters, bulletins etc.
Imparting training to officers/employees in Hindi language, Use of Hindi on computers,
and English-Hindi translation.

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 DEPARTMENTS
5. Rural Planning and Credit Department:
RPCD is primarily concerned with formulating policies relating to rural credit and monitors
timely and adequate flow of credit to the rural population for agricultural activities etc.
6. Foreign Exchange Department:
It is concerned with facilitating external trade and developing foreign exchange markets of India.
7. Human Resources Development Department:
Recruitment
Performance and Potential Appraisal
Placement etc.
8. Financial Markets Department:
This department wad established with the objective of integrating the banking sector to the
financial markets and help the bank to conduct monetary operations viz. OMOs,LAF etc.

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 DEPARTMENTS

9. Financial Stability Unit:

Development of a time series of a core set  of financial indicators.
Conduct of systemic  stress tests to assess resilience.
Preparation of financial stability reports.
10. Inspection Department (Internal):
11. Department of Banking Supervision:
This department is entrusted with the authority of regulating and supervising the
Indian Banking System including FIs.
12. Department of Non-Banking Supervision (DNBS):
Mainly concerned with supervising the NBFCs.

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 DEPARTMENTS
13. Department of Banking Operations and Development:
The Department is entrusted with the responsibility of regulation of commercial
banks under the provisions contained in Banking Regulation Act, 1949 and the
Reserve Bank of India Act, 1934 and other related statutes and development of
banking policies.
14. Department of Information Technology:
Computerizing the operation in RBI
Monitoring the progress of IT in banks.
15. Legal Department:
16. Monetary Policy Department:
17. Internal Debt Management Department:
Managing public debt of the GOI/state govts.
Management of PDs system and development of govt. securities market.
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 DEPARTMENTS
18. Department of External Investments and Operations:
Invest of foreign exchange reserves of the RBI.
19. Department of Economic & Policy Research:
Concerned with studying the issues both domestic and international affecting the Indian
economy.
20. Department of Statistics and Information Management:
Collection, processing and dissemination of data on banking, corporate and external
sectors.
21. Department of Payment and Settlement Systems:
22. Secretary's Department:
Secretarial work involving meetings of central board and its committees etc.
Secretarial work relating to deputy governors’ committee meetings.
23. External Relations and Customer Service.
Annual, quarterly, monthly and weekly reports etc.

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 DEPARTMENTS
24. Department of Communication:
25. Department of Expenditure and Budgetary
Control:
26. Department of Administration and
Personnel Management:
27. Department of Banking Operation and
Development:
28. Department of Govt and Bank accounts.
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 SUBSIDIARIES
The Reserve Bank of India has fully-owned four subsidiaries which
include
 National Housing Bank(NHB).
 Deposit Insurance and Credit Guarantee Corporation of
India(DICGC).
 Bharatiya Reserve Bank Note Mudran Private Limited(BRBNMPL).
 National Bank for Agriculture and Rural Development (NABARD).
The Reserve Bank of India has recently divested its stake in State
Bank of India to the Government of India. RBI has also set up some
training institutions.
 

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 LEGAL FRAMEWORK
There are various acts which govern the functioning of RBI, specific functions, banking
operations and individual institutions owned by RBI.
1. Umbrella Acts:
The reserve Bank of India Act, 1934, governs the RBI functions
The Banking regulation Act, 1949, governs the financial sector.
2. Acts Governing Specific Functions.
like The Securities Contract(Regulation) Act, 1956, regulates govt securities market, FEMA
Act, 1999 etc.
3. Acts Governing Banking Operations.
like Negotiable Instruments Act, 1881 etc.
4. Acts Governing Individual Institutions.
like State Bank of India Act, 1954, The Industrial Development Bank of India Act, the
National Housing Bank Act etc.

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 Bank of Issue (Under Sec 22)
• RBI has sole right to issue One Rupees Notes and small
coins in country as agent of Government.
• RBI has separate Issue Department to issue currency notes.
• RBI maintain Minimum Reserve in form of Gold and Foreign
Exchange Reserve of which almost 55% should be in Gold.

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 Banker to Government
• RBI is banker, agent and advisor of Central Government
and all State Government in India.
• RBI helps the Government to float new loans and to
manage public debt.
• RBI makes loans and advances to the States and local
authorities.

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 Banker’s Bank & Lender of Last Resort
• RBI maintains banking accounts of all schedule banks.

• Every schedule bank have to keep cash reserve a fix

percentage of their aggregate deposit liabilities .
• Banks always expect for help from RBI in time of
banking crisis.

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 Controller of Credit
• RBI holds the cash reserves of all schedule banks.

• It holds credit operations of banks through quantities

• RBI has power to ask bank or whole banking system not to

lend particular group or person.

• Every bank have to get license from RBI for banking

operation. RBI can also cancel this license.
• Every bank gives weekly return showing assets and liabilities

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 Custodian of Foreign Reserves
• RBI responsible to maintain official rate of exchange as
according terms of I.M.F.
• RBI reserves the international currency.

• RBI observes relationship of Indian Currency with other

International currency.

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 Promotional Functions
• RBI ask banks and financing agencies to promote rural and semi-urban areas by
financing (funding ).
• RBI setup directly or indirectly some institutions like :
• Deposit Insurance Corporation ( 1962 )
• Industrial Development Bank ( 1964 )
• Unit Trust of India ( 1964 )

• Industrial Reconstruction Corp. of India ( 1972 )

• Agricultural Refinance Corporation ( 1963 )

• RBI promotes villagers for saving and route this money as short term credit to agriculture.

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 Governor
• Dr. D Subbarao

 Deputy Governors

• Dr. Rakesh Mohan, Smt. S. Gopinath, Smt. Usha Thorat

 Executive Directors

• Sh. V.K. Sharma, Sh. C. Krishnan, Sh. Anand Sinha, Sh.

V.S. Das, Sh. G. Gopalkrishna, Sh. H.R. Khan, Sh. D.K.

Mohanty.

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

 Reserve Bank of India,

Central Office,

Shaheed Bhagat Singh Road,

Mumbai – 400 001,

Ph.No. 22660868, Web : www.rbi.org.in .

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R

Saturday, June 02, 2012 DINESH RAMI REDDY.M.R