Introduction, Organization Structure of RBI, Reason for establishment of RBI, Functions of RBI, Role of RBI in Inflation, Control Measures, Policy Rate in Indian Banking

1. RESERVE BANK OF INDIA
PRESENTED BY:-
SHWETA SINGH
SECTION B

2.  The Reserve Bank of India (RBI) is India’s central
banking institution.
 It was established on 1 April 1935 during the British
Raj in accordance with the provisions of Reserve
Bank of India Act, 1934 after the recommendation
from Hilton- Young commission.
 The Reserve bank of India was nationalised in 1949
under the Reserve Bank (Transfer of Public
Ownership) Act, 1948.

4.  To manage the monetary and credit system of
the country.
 For balanced and systematic development of
banking in the country.
 For the development of organized money
market in the country.
 For proper arrangement of agriculture
finance.

5.  For proper management of public debt.
 To establish monetary relations with other
countries of the world and international
financial institutions.
 For centralization cash reserves of commercial
banks.
 To maintain balance between demand and
supply of currency.

7.  Issuer Of Currency
 Design, printing and distribution.
 The bank issues and exchanges or destroys
currency and coins not fit for circulation.
 The goal of ensuring an adequate supply of clean
and genuine notes.
 Control Of Credit
 It is a major weapon of RBI used to control demand
and supply of money in the economy.

8.  Banker To Government
 Performs merchant banking function for the central
and the state governments.
 Also acts as their bankers.
 Banker To Bank
 Transfer funds and settle inter-bank transactions.
 All banks operating in the country have accounts
with the Reserve bank.

9.  Manager Of Foreign Exchange
 It acts as a custodian and manages the Foreign
Exchange Management Act, (FEMA) 1999.
 RBI buys and sells foreign currency to maintain the
exchange rate of Indian Rupee v/s foreign currencies
like the US Dollar, Euro, Pound and Japanese Yen.

10.  Collection And Publication Of Data
 The RBI has a separate Department of Statistics for
collecting, compiling and disseminating statistical
information.
 Regulatory And Supervisory
 The RBI Act and the Banking Act have both conferred
extensive powers of regulations & supervisions to
the RBI over commercial & cooperatives banks to
protect interests of investors.

11.  Development And Promotion
 The RBI has been aiding development & promoting
saving & banking habits.
 Development of the institutional agriculture and
other rural activities has been an area of focus from
its inception.

12.  Inflation arises when the demand increases and
there is a shortage of supply.
 There are two policies in the hands of the RBI.
1. Monetary Policy
2. Fiscal Policy

13.  Bank Rate
 It is the interest rate that is charged by a bank loans
and advances to control money supply in the
economy.
 Repo Rate
 It is the rate at which RBI lends money commercial
banks in the event of any shortfall of funds.

14.  Reverse Repo Rate
 It is the rate at which the Reserve Bank of India
borrows money commercial banks within the
country.
 CRR (Cash Reserve Ratio)
 Cash Reserve Ratio (CRR) is a specified minimum
fraction of the total deposits of customers which
commercial banks have to hold as reserves with the
RBI.

15.  SLR (Statutory Liquidity Ratio)
 It is the amount a commercial bank needs to
maintain in the form of cash or gold or government
approved securities (Bonds) before providing credit
to its customers.
 It is maintained by the RBI in order to control the
expansion of bank credit.

16. RATES (%)
Bank Rate 8.75
Cash Reserve Ratio 4.00
Statutory Liquidity Ratio 21.50
Repo Rate 7.75
Reverse Repo Rate 6.75

17.  RBI is an autonomous body promoted by the
government of India and is headquartered in
Mumbai.
 RBI plays important role in achieving economic
growth of a country.
 It helps in attaining full employment balance of
payment disequilibrium and in stabilizing exchange
rate.
 RBI operates a number of government mints that
produce currency and coins.