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Krishna Singh RBI Assignment
Krishna Singh RBI Assignment
o License issuing
o Liquidity of assets
o Bank mergers
o Branch expansion, etc.
Managing Foreign Exchange
The Reserve Bank of India is responsible for providing the public with
a sufficient supply of currency notes and coins.
The quality of currency notes and coins is also taken care of by the
RBI.
RBI oversees issuing and exchanging of currency and coins.
Also, the destruction of currency and coins that are not fit for
circulation.
A3.
A4.
The governor of the RBI is responsible for controlling
the interest rates on deposits and advances of the
country. However, this control is limited to the extent
of prescribing interest rates on savings account and a
minimum lending rate.
The governor of the RBI is responsible for regulating
and administering the financial system of the nation.
He is responsible for setting parameters within which
the whole financial system will function. Not a rupee
can be moved without the permission of the governor
of RBI.
The foreign exchange management Act, 1999 which is
to facilitate external trade and payment and to
promote orderly development and maintenance of
foreign exchange market in India is managed by the
governor of RBI.
The RBI governor is further responsible to monitor the
issue and destruction of currency and coins which are
not fit for circulation in public. He is also responsible
to monitor the adequate quantity of currency notes
and coins are supplied and in good quality.
He also has a major role to play when it comes to
helping and promoting functions to support national
objectives.
Current RBI Governor - Shri Shaktikanta Das
Reverse Repo Rate is when the RBI borrows money from banks
when there is excess liquidity in the market. The banks benefit out
of it by receiving interest for their holdings with the central bank.
A7. Under cash reserve ratio (CRR), the commercial banks must
hold a certain minimum amount of deposit as reserves with the
central bank. The percentage of cash required to be kept in
reserves as against the bank's total deposits, is called the Cash
Reserve Ratio. The cash reserve is either stored in the bank’s
vault or is sent to the RBI. Banks can’t lend the CRR money to
corporates or individual borrowers, banks can’t use that money for
investment purposes. And Banks don’t earn any interest on that
money.
Q8. SLR?
A8. SLR, or statutory liquidity ratio, determines the amount of
money a bank needs to invest in certain specified securities,
which are predominantly securities issued by the central
government and state governments. RBI fixes this limit.
Unlike CRR, money invested under the SLR window earn some
interests for banks. But they can’t access this fund for lending
purposes.
Q9. NPA?
A9. It refers to those loans and advances that are in default or in arrears
i.e., principal and interest payments are late or missed. As per the RBI,
an asset becomes non-performing when it stops to generate income for
the bank.
Types of NPAs
Term Loans
Overdraft and cask credit facility left out of order for more than 90
days.
Agricultural advances whose interest and principal
instalment payment remains overdue.
Expected payment is overdue for more than 90 days for any other
type of account.
Through National Electronics Funds Transfer, Large amounts of funds can be used to transfer instantly
transactions of any amount can be sent to the with Real-Time Gross Settlement. The transaction speed is
recipient’s account without any maximum faster than any other form of online payment.
limit to the funds that can be sent in a day
The National Electronic Funds Transfer The minimum amount needed to be transferred must be of
method does not have a minimum transfer Rs. 2 Lakhs and above for RTGS
limit ceiling.
The funds transferred through NEFT are The Reserve Bank of India (RBI) has allocated the following
processed in 12 batches between 8:00 AM to timeslots for Real-Time Gross Settlements:
6:30 PM on weekdays and between 8:00 AM
and 1:00 PM on Saturdays. It is not available 9:00 AM – 4:30 PM on weekdays
on Sundays and bank holidays.
9:00 AM – 1:30 PM on Saturdays
The settlement of funds happens on a half- The settlement of funds is instantaneous and happens in real-
hourly basis time
The NEFT mode is used when the transactions RTGS is used in high-value transactions.
are of smaller values.
The National Electronic Funds Transfer The Real-Time Gross Settlement system was first
system was introduced in November 2005 to implemented in India in March 2004 as a major technology-
replace the Special Electronic Fund Transfer based electronic funds transfer system across the country.
(SEFT) system that was in use at the time.
When NEFT transactions fail or are not In an event when transactions fail, the money is credited into
processed on time, destination banks are the sender’s account once the money is received back by the
required to return the fund to the originating remitting bank. The funds are returned to the originating
branch within two hours of completion of the bank within one hour or before the end of the RTGS
batch in which the transaction was processed business day or whichever comes first
Q12.Commencement of RBI and Affiliation of RBI?