RESERVE BANK OF INDIA- STRUCTURE & FUNCTIONS
Introduction
Reserve Bank of India (RBI) is central bank of India which controls the monetary policy of the Indian Rupees.
- It was started on 1April, 1935 under the RBI Act,1934 and later nationalized on 1 January 1949.
- RBI was established on the recommendation of Hilton young commission.
- It is a statutory body and its accounting year is from July to June. It brings out annual update of its law on 1 July every year.
Structure of RBI
- The central board of directors is the main committee of RBI. It consists total 21 members. Out of these total, there is 1-Governer and 4-Deputy governors.
- Governor- Shaktikanta Das (25th Governor)
Functions of RBI
The functions are categorized under three heads, i.e., Main functions, Regulatory & Supervisory functions and Promotional functions. Let’s see each one briefly.
Main Functions- These includes:
- RBI issues currency of Rs.2 & above (maximum limit to issue note Rs.10,000)
- Banker to government- Manage banking needs of government, all transaction of center and state carried out by RBI.
- Banker to other banks- It has power to control, help and direct other commercial banks. RBI is the lender of last resort to commercial banks.
- Custodian of country’s foreign currency Reserves
- Central clearance & Accounts settlement- Commercial banks deal and settle the claim of each other through RBI clearing keeping entries in the book of Reserve bank.
- Controller of credit- RBI controls credit supply according to economic priority of the government.
- Selective credit- RBI also restricts the banks to finance against sensitive commodities like foods, grains etc. in order to make price stable.
Regulatory & Supervisory functions
- Issues license to open new banks and also branch expansion to existing bank.
- It has power of appointment and removal of banking board/personnel.
- It has power to regulate the banking business and give directions on functioning of banks from time to time.
- Power to inspect, conduct audit, supervise banks and impose practice norms.
- Power relating to moratorium, amalgamation and winding up.
- Power to collect and furnish credit information & impose penalty.
Promotional functions
- Establishment of financial institution like SIDBI, IFCI.
- Promotion of agriculture through NABARD, Agriculture college, Pune etc.
- Promotion of RRBs to make banking reachable to rural areas.
- Promotion of foreign trade by establishing Export-Import banks and facilitating Indian banks to open branches in foreign centers.
- Development of money market.
- Promotion of housing sector through initiating NHB.
- Establishment of DICGC (Deposit Insurance and Credit Guarantee Corporation).
RBI Offices
- RBI has 4- zonal offices- West in Mumbai, East in Kolkata, South in Chennai and North in New Delhi.
- It has also 19-Regional offices.
RBI’s Research Institutes
- NIBM (National Institute of Bank management) at Pune, Maharashtra.
- IGIDR (Indira Gandhi Institute of Development Research) at Mumbai, Maharashtra.
- IDRBT (Institute for development and Research in Banking Technology) at Hyderabad.
RBI’s Subsidiaries
- NHB (National Housing Bank)
- NABARD (National Bank for Agriculture & Rural Development)
- DICGC (Deposit Insurance and Credit Guarantee Corporation)
- BRBNMPL (Bhartiya Reserve Bank Note Mudran Private Limited)
RBI’s Training Centers
- The Reserve Bank staff college, Chennai.
- The College of Agriculture Banking, Pune.
FAQ (Frequently Asked Question)
When did RBI get started?
RBI was started on 1 April 1935 under RBI Act, 1934 on the recommendation of Hilton young Commission.
When did RBI get nationalized?
1 January, 1949.
Who is the present Governor of RBI?
Shri Shaktikanta Das (25th Governor)
Who was the 1st governor of RBI?
Sir Osborne Smith (1 April 1935).
Who was the 1st Indian governor of RBI?
Sir C.D. Deshmukh (11 August 1943).
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