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The Reserve Bank of India
The Reserve Bank of India
To operate the credit and currency system of the country to its advantage.
Functions of RBI
General superintendence and direction of the Bank's affairs
Financial Supervision
The Reserve Bank of India performs this function under the guidance of the Board for Financial Supervision
(BFS). The Board was constituted in November 1994 as a committee of the Central Board of Directors of the
Reserve Bank of India. Primary objective of BFS is to undertake consolidated supervision of the financial
sector comprising commercial banks, financial institutions and non-banking finance companies.
RBI as Monetary Authority
Formulates, implements and monitors the monetary policy
Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.
RBI as Regulator and Supervisor of the Financial System
Prescribes broad parameters of banking operations within which the country's banking and financial
system functions.
Objective: maintain public confidence in the system, protect depositors' interest and provide costeffective banking services to the public.
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Objective: to facilitate external trade and payment and promote orderly development and maintenance of
foreign exchange market in India.
Issues and exchanges or destroys currency and coins not fit for circulation.
Objective: to give the public adequate quantity of supplies of currency notes and coins and in good
quality.
Licensing requirement:
To do a business of commercial banking in India, whether it is India or Foreign, a license from RBI is
required.
Corporate Governance:
RBI policy ensures high quality corporate governance in banks.
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Interest Rates
Prudential Norms
Structure of RBI
The Reserve Bank of India is wholly owned by the Government of India. Its structure is simply represented by
the following:
1. Central Board of Directors
2. Committee of the Central Board
3. Board for Financial Supervision
4. Board for Payment and Settlement Systems
5. Subcommittees of the Central Board
6. Local Boards
Subsidiaries of RBI
NABARD
Every eligible bank depositor is insured up to a maximum of `1,00,000 (Rupees One Lakh) for both principal
and interest amount held by him.
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RBI can issue currency notes as much as the country requires, provided it has to make a security deposit
of Rs. 200 crores, out of which Rs. 115 crores must be in gold and Rs. 85 crores must be FOREX
Reserves.
C D Deshmukh was the governor of RBI at the Time of nationalization of RBI in 1949.
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1 woman Governor of RBI - K.J. Udeshi
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C. Rangarajan :22.12.1992-22.11.1997
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