PALLAVI JOSHI ROLL NO ± 12 REG NO - 7020070050

y Meaning y Introduction to RBI y Nationalization of RBI y Role of central bank in under-developed economy y Functions of RBI y Financial Inclusion

y Central bank is a central point to the entire banking

system.
y It is the apex financial institution of a country¶s economy

through which the economic policy of the country in general, and monetary policy in particular are

implemented.

y The RBI is the central bank of the country. y It was established on the recommendations of Hilton

Young Commission.
y It has been established as a body corporate under the

Reserve Bank Of India Act, 1934 which came into effect from 1st April, 1935.

y The RBI was started as shareholders bank with a paid-up

capital of Rs. 5 crores was divided in 5 lakhs shares of Rs. 100 each.
y On establishment it took over the function of management

of currency from the Government of India and power of credit control from the Imperial Bank of India.

y The Reserve Bank was nationalized in 1948 soon after the

independence. The basic reasons for nationalization were as follows:
y There was a trend towards nationalization of central Bank

of the country in all parts of the world after the end of the second world war.

y The inflationary tendencies had started right from the

beginning of the second world war. In order to control these tendencies effectively, it was thought proper to nationalize the RBI, the central bank of country responsible for credit and currency management.
y Nationalization was necessary to use it as an effective

instrument for economic development of the country

y Direct dealings with public y Development of integrated commercial banking system y Price stability y Providing manpower training

y Monetary expansion y Proper branch expansion y Ensure balanced Regional Growth y Maintenance low rate of interest y Removal of deficit in the Balance of Payment

TO ACCEPT DEPOSITS

TO DEAL IN BILLS

LENDING OF MONEY

TO DEAL IN FORIGN SECURITIES

TO DEAL IN COSTLY METALS

PROMOTION OF AGRICUTURAL FINANCE

PROMOTION OF INDUSTRIAL FINANCE

PROMOTION OF EXPORT FINANCE

PROMOTION OF BANKING

Delivery of financial services at an affordable cost to vast sections of disadvantaged and low income groups 

Savings  Credit  Insurance  Remittance facilities etc.

y PRODUCTS  No frill account KYC norms simplified Introduction of GCC  KCC  OTS for overdue loans up to Rs. 25000/-

y Micro Finance Development and Equity Fund y Financial

Inclusion

Fund

for

Development

and

Promotional Interventions
y Financial Inclusion Technology Fund to meet cost of

technology

y Regional Rural Banks (RRBs) have been

advised to offer ³no frills´ account facilities
y RRBs have been permitted to set up ATMs y The Reserve Bank has advised scheduled

commercial banks and RRBs to introduce a General Credit Card scheme (GCC)

y RBI Is Pushing Commercial Banks Hard To Pass On New

Loan Rates To Its Existing Customers
y At Present Many Pvt And Public Sector Banks Have Been

Offering Home Loans At Rates As Low As 8% And For Old Customers 10% - 12%
y RBI Changes Prime Lending Rate System To Base Rate In

Order To Make Credit Market More Transparent
y New Base Rate Is Fixed On The Basis Of Cost Of Funds

THANKYOU

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