RESERVE BANK OF

INDIA
BY

ANIL KUMAR SINHA

Establishment of Reserve Bank

of India
Background
Royal
Commission in the year 1926
recommended to establish Central Bank
in India to perfect its credit and currency
organization.
A
Bill was introduced in Legislative
Assembly in Sept. 1933.
It was enacted and became Law on 6th
March,1934.
RBI Started Functioning in April 1935.

CONSTITUTION OF RBI
RBI was constituted as share holder Bank
with share capital of 5 crore divided in to 5
lacs shares of 100 rupees each.
The Central Office of the Reserve Bank was
initially established in Calcutta but was
permanently moved to Mumbai in 1937.
The Central Office is where the Governor
sits and where policies are formulated.

CONSTITUTION OF RBI..
In order to have
a close integration
between the policies of the RBI and those
of the Government, the reserve Bank of
India was nationalized
in terms of
Reserve Bank of India (Transfer to public
ownership) Act 1948. The entire share
capital of the Bank was acquired by the
central Government. From 1st January
1949 the RBI began functioning as a
state owned and state controlled Central
Bank.

RBI OFFICES
For successful operation of the Bank country
was divided into five regions where RBI offices
were opened.
1. Bombay
2. Delhi
3. Madras
4. Calcutta
5. Yangoon it was closed in 1947.
As
on date RBI has 19 regional offices, most of th
em in state capitals and 9 Sub-offices
.

PREAMBLES OF RBI

The Preamble of the Reserve Bank of

India describes the basic functions 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.

MAIN FUNCTIONS OF RBI

Banker to the Government:

Performs banking function for the
central and the state governments.

RBI transacts Government business& manages

debt U/S 20 of RBI for central govt and u/s 21A
for state government.
Advices Government on monetary policy
matters.
Provides ways and means advance u/s 17(5) to
Govt. for meeting temporary mismatch
/shortfall in revenue.

MAIN FUNCTIONS OF RBI

Banker to banks:
Maintains banking accounts of all scheduled
banks. Provides adjustment facilities i.e
injection of liquidity through repo auction &
absorption of liquidity through reverse repo
auctions.
Issuance of Currency (Section 22 of RBI Act)
RBI is the sole authority India to issue Bank notes of
various denominations under signature of Governor.

Monetary Authority: Formulates, implements

and monitors the monetary policy.

MAIN FUNCTIONS OF RBI

Regulator and supervisor of the financial

system: Prescribes broad parameters of
banking operations within which the country's
banking and financial system functions.
Manager of Foreign Exchange : Manages the
Foreign Exchange Management Act, 1999.
Developmental role : Performs a wide range
of promotional functions to support national
objectives
Controller of credit

Selective credit policy, change in CRR / SLR,

Directed credit guidelines,

Various Departments of
RBI
1.
2.
3.
4.

Rural Planning and Credit Department.

Foreign Exchange department.
Financial supervision department.
Department of Banking Supervision.
On sight supervision.
2. off sight supervision
Department of Banking Operations and
Development
Department of non Banking Supervision
Department of information technology
Legal Department
1.

5.

6.
7.
8.

Various Departments of
RBI
9.
10.
11.

12.
13.

14.
15.

Monetary policy department.

Debt Management department
Department of Government and Bank
Accounts.
Department of External investment.
Department of Economic Analysis and
Policy.
Department of Statistical Analysis.
Department of Payment Settlement.

THANK
YOU