Reserve Bank of India

It is a central bank of the country. It acts as a

guide, regulator, controller and promoter of the
financial system.
RBI was established in 1935.
 Reserve Bank of India
 The Reserve Bank of India (RBI) is the central bank of
India, and was established on April 1, 1935 in accordance
with the provisions of the Reserve Bank of India Act, 1934.
The Central Office of the Reserve Bank was initially
established in Calcutta but was permanently moved to
Mumbai in 1937. Though originally privately owned, RBI
has been fully owned by the Government of India since
nationalization in 1949.
 Duvvuri Subbarao who succeeded Y. Venugopal Reddy on
September 2, 2008 is the current Governor 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.
 It has 22 regional offices, most of them in state capitals.
 Departments of RBI
1. Issue Department
2. Banking Department
3. Banking development Department
4. Department of Banking operations
5. Department of Non Banking companies
6. Department of legal affairs
7. Exchange control Department
8. Department of agriculture credit
9. Department of industrial finance
10. Economics Department
 Departments of RBI
11. Department of research and statistics
12. Inspection Department
13. Department of planning and re-organization
14. RBI services board
15. Department of Accounts and expenditure
16. Department of supervision
17. Control Department
18. External investment and operations
19. Press relations Department
20. Industrial and export credit
 Role and functions of RBI
1. A Currency authority
2. Banker to the Govt.
3. Advisor to the Govt.
4. Banker’s Bank
5. Lender of the last resort
6. Supervision of the Banks
7. Controller of money and credit
8. Foreign exchange control and management
9. Monetary data publication
10. Promotional Functions
i) Promotion of commercial banks
ii) Promotion of co-operative banks
iii) Promotion of agriculture and rural credit
Iv) Promotion of industrial finance
 Prohibitory functions of RBI
1. RBI can not provide any direct financial
Assistance to any industry, trade or business
2. It can not purchase its on share.
3. It can not purchase shares of any commercial
and industrial undertaking.
4. It can not purchase any immovable property.
5. It can not give loans on the security of shares
and property.
 Monetary policy
Monetary policy refers to the use of official
instruments under the control of the central
bank to regulate the availability, cost and use
of money and credit with the aim of achieving
optimum levels of output and employment,
price stability, balance of payments
equilibrium or any other goals set by the state.
 The measures/ Techniques of credit
control
1. Quantitative credit control
2. Selective credit control
 1. Quantitative credit control
1. Bank rate
2. Cash reserve ratio
3. Statutory liquidity ratio
4. Open market operations
 2.Selective credit control

The regulation of credit for specific purpose is

termed as selective credit control.
Some of the selective measures of RBI:-
1. Directions
2. Rationing
3. Margin requirement
4. Moral suasion