RBI(RESERVE BANK OF INDIA)

GROUP MEMBERS

RAJATH KUNDER HARSHAL KARELIA AKASH UPADHAYAY PRAJAKTA ROKADE KARAN SHAH

INTRODUCTION OF RBI

It is the Central Bank of India Established in “1st April 1935” under the “RESERVE BANK OF INDIA ACT”.

Its head quarter is in Mumbai (Maharashtra). Its present governor is

“Mr. Raghuram Rajan”.

It has “22 Regional Offices”, most of them in State capitals.

RBI also control the inflation by maintaining CRR and SLR ratio.

CRR in between 3% to 20% & SLR is 8% {SLR includes cash reserve, gold reserve, approved government securities(22%)}

PREAMBLE

The preamble of Reserve Bank of India describes the basic functions of the reserve bank as : “….. to regulate the issue of Bank Notes and keeping of reserve with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage ”

ORGANIZATION STRUCTURE

ORGANIZATION OF RESERVE BANK :

1 Governor

4 Deputy Governor.

1 Government Officials from the Ministry of Finance.

4 nominated directors

by the Central Government to represent the local boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi.

10 nominated directors by the Government to give representation to important elements in the economic life of country.

FUNCTIONS OF RBI

ISSUE OF CURRENCY DEVELOPMENT ROLE BANKER TO GOVERNMENT BANKER TO BANK ROLE OF RBI IN INFLATION CONTROL FORMULATE MONETARY POLICY MANAGER OF FOREIGN RESERVE CLEARING HOUSE FUNCTIONS REGULATIONS OF BANKING SYSTEM

BANK RATES

It’s the interest rate that is charged by a country’s central bank on loans and advances to control money supply in the economy and the banking sector.

This is typically done on a quarterly basis to control inflation and stabilize the country’s exchange rates.

A fluctuation in bank rates Triggers a Ripple-Effect as it impacts every sector of a country’s economy.

A change in bank rates affects customers as it influences Prime Interest Rates for personal loans.

The present bank rate is 9.5%

QUANTITATIVE MEASURES. Bank rate policy Open market operation Cash reserve ratio Statutory liquidity ratio

Qualitative measures. Margin requirement Consumer credit regulation Guidelines Rationing of credit Direct action.

TYPES OF MEASURES TO CONTROL INFLATION

TYPES OF RATES BY RBI

REPO RATE REVERSE REPO RATE

Impact due to change in repo rate and reverse repo rate on following :

1.) Interest rate 2.) Exchange rate3.) Inflation

RBI REGULATION FOR THE PROTECTION OF CUSTOMER

(“KYC NORMS”)

KYC policy Customer Acceptance Policy Customer Identification Procedures Monitoring of Transactions Risk Management

MEANING OF MONETARY POLICY

Monetary policy is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.

OBJECTIVES OF MONETARY POLICY

PRICE STABILITY CONTROLLED EXPANSION OF BANK CREDIT PROMOTION OF FIXED INVESTMENT RESTRICTION OF INVENTORIES PROMOTION OF EXPORTS AND FOOD PROCUREMENT

OPERATIONS DESIRED DISTRIBUTION OF CREDIT EQUITABLE DISTRIBUTION OF CREDIT TO PROMOTE EFFICIENCY REDUCING THE RIGIDITY

CONCLUSIONEvery authority concerned with co-operative sector will have to play its part in ensuring that the aspirations of the urban co-operative banking sector are nurtured in a manner that depositor interest and the public interest at large is protected. The role of RBI could, thus, be to frame a regulatory and supervisory regime that is multi-layered to capture the heterogeneity of the sector and implement policies that would provide adequate elbowroom for the sector to grow in a non-disruptive manner. The state and central governments could recognize that the UCBS are not just co-operative societies but they are essentially banking entities whose management structure is that of a co-operative.