RBI: Organization, Management and Function

1. Presentation on
Reserve Bank Of India
(RBI):
Organisation, Management and Functions
Presented by:
Ashutosh Sahu
MBA 3rd Semester
Submitted to:
Mr. Abhishek Gupta
Faculty of Management
Science

2. Flow of Presentation
• Introduction
• Organisation Structure
• Management
• Functions
• What does Reserve Bank of India Do (Video-5 min)

3. RBI: Introduction
• It is the Central Bank of India Established in 1934 under
the RESERVE BANK OF INDIA ACT 1934.
• It’s head quarters is in Mumbai (Maharashtra).
• It has 31 offices in which four are regional offices located
in metropolitan cities.
• It was set up on the recommendations of the Hilton Young
Commission.
• It was started as share-holders bank with a paid up capital
of INR 5 crore.
• Initially it was located in Kolkata. It moved to Mumbai in
1937.

4. Continued…
• Initially it was privately owned. The govt. had a nominal
value of shares of INR 2,20,000. Later on in 1949, the
bank was nationalised and is fully owned by the Govt. of
India.
• Its First governor was Sir Osborne A.Smith(1st April 1935
to 30th June 1937)
• The First Indian Governor was “Sir Chintaman
D.Deshmukh”(11th August 1943 to 30th June 1949).
• Its present governor is Dr. Urjit R. Patel (4th Sept, 2016-
Onward).

5. Organisation Structure

6. Continued…

7. Management
• Central Board of RBI: The Reserve Bank’s affairs are
governed by a central board of directors. The board is
appointed by the Government of India in keeping with the
Reserve Bank of India(RBI) Act 1934.
• Constitution: The organization and management of RBI is
vested on the Central Board of Directors. It is responsible
for the management of RBI. Central Board of Directors
consist of 20 members. It is constituted as follows.
– One Governor: It is the highest authority of RBI. He is appointed
by the Government of India for a term of 5 years. He can be re-
appointed for another term.

8. Continued…
– Four Deputy Governors: Four deputy Governors are
nominated by Central Govt. for a term of 5 years.
– Fifteen Directors: Other fifteen members of the Central Board
are appointed by the Central Government. Out of these , four
directors, one each from the four local Boards are nominated by
the Government separately by the Central Government.
• The Central board of directors exercises all the powers of
the bank.
• The Central Board should meet at least six times in each
year and at least once in three months.

9. Continued…
• Usually, the Central Board keeps a meeting in March
every year at New Delhi so as to discuss the budget with
the Finance Minister after its presentation in parliament.
• Similarly, it keeps a meeting in August at Mumbai in
order to pass the Bank’s annual report and accounts.

10. Functions
• Monetary Authority:
– Formulates, implements and monitors the monetary policy.
– Objective: maintaining price stability while keeping in mind the
objective of growth.
– As on 28,Dec, 2017
Monetary Policy Rates
Repo Rates 6.00%
Reverse Repo Rate 5.75%
Marginal Standing Facility 6.25%
Bank Rate 6.25%
Cash Reserve Ratio 4%
Statutory Liquidity Ratio 19.5%

11. Continued…
• Regulator and supervisor of the financial system:
– Prescribes broad parameters of banking operations within which
the country's banking and financial system functions.
– Objective: maintain public confidence in the system, protect
depositors' interest and provide cost-effective banking services
to the public.
• Manager of Foreign Exchange:
– Manages the Foreign Exchange Management Act, 1999.
– Objective: to facilitate external trade and payment and promote
orderly development and maintenance of foreign exchange
market in India.

12. Continued…
• Issuer of currency:
– Issues and exchanges or destroys currency and coins not fit for
circulation.
– Objective: to give the public adequate quantity of supplies of
currency notes and coins and in good quality.
• Developmental role:
– Performs a wide range of promotional functions to support
national objectives.
• Related Functions:
– Banker to the Government: performs merchant banking function
for the central and the state governments; also acts as their banker.
– Banker to banks: maintains banking accounts of all scheduled
banks.

13. What does the Reserve Bank of
India Do?