Reserve Bank Of India

By Banking_awareness 2 years ago
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• RBI is the central bank of India .It is a statutory body .
• RBI was set up on the basis of the recommendations of the Royal Commission on Indian        Currency and Finance also known as the Hilton-Young Commission.
• RBI's central office is in Mumbai .
ʉۢRBI established on April 1,1935 under RBI act ,1934.
  •Initially RBI was constituted as a private share holders' bank with fully paid up capital of Rs.        5 crore.
  •RBI served as the central bank for Pakistan until June 1948.
ʉۢ RBI nationalized on January 1,1949.
ʉۢ Scheduled banks of India are included in second schedule of RBI act,1934.
ʉۢPaper currency of India is issued by RBI under section 22 of RBI act,1934
ʉۢThe financial year for RBI is July to June but for the banks is April to March .
ʉۢRBI is lender of last resort .
ʉۢRBI is not expected to perform the function of accepting deposits from the general public .
 â€¢RBI controls monetary policy . The objective of monetary policy of RBI is to control inflation    and encourage flow of credit into neglected sector .
 â€¢Mr. Osborne Smith was the first governor of RBI, while C. D. Deshmukh was the first Indian    governor of RBI . The position is currently held by Urjit Patel, who took over from    Raghuram  Rajan.
ʉۢ C. D. Deshmukh was the governor of RBI at the time of nationalization of RBI .
 â€¢ The method which is used currently in India to issue currency note is Minimum reserve  system.For issuing note, RBI is required to hold the minimum reserve of Rs. 200 crore of which  Rs. 115 crore is to be held in gold.
ʉۢ Government of India decides the quantity of coins to be minted .
 â€¢ RBI  decides the following rates - Bank rate, repo rate, reverse repo rate , cash reserve ratio ,  statutory liquidity ratio.
 â€¢Base rate is decided by the bank but minimum and maximum value of base rate is controlled by  RBI. 
ʉۢ Functions of RBI :-
                                 ‣ Issuance of currency .
                                 â€£ Bankers' bank. 
                                 ‣ Banker to Government.
                                 ‣ Control liquidity in Banking system .
                                 ‣ Monitor the Monetary policy .
                                 ‣ Give loan to commercial banks .
                                 ‣ Development role .
                                 ‣ Granting license to banks .
                                 ‣ Control over NBFC (Non Banking Financial Company ).


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