STRATEGIC ASPIRATIONS OF

THE RESERVE BANK OF INDIA

Presented by:
GAURI MATHUR
MBA(F&C)-Sem. III
 Structure of the Presentation

 Brief on R.B.I.

 Ques. 1:

1. What a good vision and mission statement be?

2. Evaluation of the Vision and mission statements of the R.B.I.

 Ques. 2:
1. RBI’s Strengths & Weaknesses
2. The current approach of the R.B.I.
3. The suggested approach
4. Brief overview on the current trend of central bank autonomy
5. Suggestions
 Brief on R.B.I.

 Established on 1st April, 1935 under the provision of the RBI Act, 1934.

 The Reserve Bank ( transfer to Public Ownership) Act, 1948 empowered the Central
Government to issue such directions to the RBI as it might, after consultation with the
Governor of the Bank, consider necessary in public interest.

 The Reserve Bank entered upon its career as a state owned institution from January 1,
1949.

 The main function of the Bank is to act as the note issuing authority.

 The RBI is the controller of the foreign exchange.

 It is the sponsor bank of SBI, IDBI, NABARD & NHB.

 The bank sits on the board of all banks and it counsels the Central and State govt. and all
PSUs on monetary and money matters.
 The management of the RBI is the responsibility of the
central board of directors.

 There are four local boards based at Chennai, Kolkata,

Mumbai and New Delhi.

 The day-to-day management of the RBI is in the hands of the

executive directors, managers at various levels and support
staff.

 There are about 22000 employees at RBI, working in 25

departments and training colleges.
Organizational Structure of the RBI
Roles of RBI
EVALUATE THE MISSION
AND VISION STATEMENT
OF RBI.
Visioning can be considered as establishing where
you want the organization to be in the future;

A vision should be…

 An organizational charter of core values and principles

 The ultimate source of organizational priorities, plans and goals

 Realistic and idealistic at the same time

 A puller into the future

 A determination and publication of what makes the organization unique

 A declaration of independence
 Evaluation of RBI’s VISION
The RBI aims to be the
leading central bank with:
Credible
 Transparent
 Proactive and
Contemporaneous
policies
to be a catalyst for the
emergence of a globally
competitive financial
system that helps deliver a
high quality of life to the
people in the country
 Values and principles delivered by the Vision
statement of the RBI: Credibility,
Transparency, Contemporary and
Proactive policies.

Organizational priorities: establishment of a
sound and globally competitive
financial system along with delivering
a high quality of life for the people of
the country.

The vision statement of the RBI professes that the
management be abreast with the
contemporary times and frame the policies of
the bank accordingly for the fulfillment of the above
stated goals and objectives.
 Realistic and Idealistic at the same time
(realistic in order to be perceived as achievable and
thus motivating and idealistic enough not to be
achieved without strech and thus set standard of
excellence)
Mission statements describe why your
company or business unit exists.
A mission should be…
 Feasible

 Precise

 Clear

 Motivating

 Distinctive

 Should indicate the major components of strategy

 Should indicate how objectives are to be achieved

 Evaluation of RBI’s MISSION

RBI seeks to  Is feasible: as it aims to achieve a balanced &

develop a sound sustainable and not a supernatural growth of
the economy.
and efficient
financial system  Is precise & clear: as it briefly states the
with monetary overarching goals, i.e. of developing a sound
and efficient financial system, for the
stability management.
conducive to
balanced and  The mission statement of the RBI clearly
states the long term objectives of the RBI, i.e.
sustained growth to achieve a balanced and sustainable growth
of the Indian of the Indian economy in the long run, and
also identifies the path to be taken to achieve
economy. this objective of the organization.
HOW MISSION HELPS IN ACHIEVING VISION

core beliefs and values + purpose =

guiding philosophy

guiding philosophy + mission = vision

QUES 2:-SHOULD THE R.B.I. GO FOR
A SYSTEMATIC AND
COMPREHENSIVE STRATEGIC PLAN
IN PLACE OF ITS EARLIER
PRAGMATIC APPROACH OF
RESPONDING TO ENVIRONMENTAL
EVENTS AS AND WHEN THEY
OCCUR?
 RBI’s Strengths and Weaknesses

Strengths:
 A large body of competent
officers and staff.
 Access to key data on the
economy.
 Wide organizational network with
22 regional offices.
 Established infrastructure.
 Ability to attract talent.
 Financial self sufficiency.
Weaknesses:
 Structural rigidity.
 Lack of accountability and
slow decision making.
 Eroded specialist know-how.
 Strong employee unions with
rigid industrial relations stance.
 Surplus staff.
 Weak market intelligence.
 RBI’s Current Approach

 Owing to its weaknesses of:

o Slow decision making
o Eroded specialist know-how; and,
o Weak market intelligence
the RBI has always been the one to react to the changing
environment.

 The RBI adopted the time tested technique of responding

to the external environment in a pragmatic manner and
making piecemeal changes.

 However, this approach is highly flexible and leaves good

scope for making changes at any time considering that the
initial changes made are small and retractable.
 The Suggested Approach

 Adoption of a systematic and comprehensive

strategic plan.

 The strategic plan reiterates anticipation of the

evolving external environment in the mid term

 Revisiting the organizational strengths and weaknesses

 And doing away with outdated mandates for

enhancing efficiency in operations in furtherance of
best public interest
 The results of these efforts are likely to manifest in attaining:
 A visible focus
 Reinforced proficiency
 Realization of a shared sense of purpose
 Optimizing resource use
 Build up of momentum to achieve goals

 However, with the adoption of a comprehensive strategic plan

the flexibility of the pragmatic approach is traded off with.