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Established on April 1, 1935 with

share capital of Five Crores on

recommendation of Hilton Young

Commission

RBI was Nationalized in Year

1949.

Central Office was initially

established in Calcutta and moved

to Mumbai in 1937


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RBI Have 20 Directors :

The Governor

Four Deputy Governor

One Govt. Official from Ministry of Finance.

Ten Nominate Director, nominated by

Four Directors to represent Headquarters at

Mumbai, Kolkata, Chennai & New Delhi.

Appointed/ Nominated for period of Four Years.


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GovernorDr. D Subbarao

Deputy Governors

Dr. Rakesh Mohan, Smt. S. Gopinath,

Smt. Usha Thorat

Executive Directors

Sh. V.K. Sharma, Sh. C. Krishnan, Sh. Anand

Sinha, Sh. V.S. Das, Sh. G. Gopalkrishna, Sh.

H.R. Khan, Sh. D.K. Mohanty


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Head office in Mumbai.24 Regional offices, most of them in State

Capital.


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InitiallyCentral office initially in Calcutta shifted to

Bombay in 1937.

Main function were note issuance & being a banker

to govt.

No formal monetary policy formulation.This lead to number of failures which resulted in the

nationalization of reserve bank with the banking

regulation Act


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Responsibility of RBI get new dimension

due to following changes

Launch of Five year plans 1951

Institutional development assumed importance

in1960- 1970

Liberalization 1990


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Function of Reserve Bank

Issue of bank notes

Banker to government

Bankers Bank

Custodian of Foreign Exchange Reserves

Controller of Credit


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Role of RBI

Regulation and supervision of currency

Financial market developments

Monetary Fiscal Interface


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REGULATION AND

SUPERVISION OF CURRENCY

Has been in focus after the

nationalization of

commercial bank in 1969 Includes-

a)soundness of banking

operationb)Introduction of deposit

insurance scheme


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FINANCIAL MARKET

DEVELOPMENT

Need of financial development

1) administered interest rates

2) weak banking structure

3) lack of proper accounting

Development of Financial market

Complex process depends on

various factors


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1)Sound financial institution

2)A Favorable legal framework

3)Technological support

4)Congenial policy environment

Importance of Financial Market1)Improve management of liquidity and treasury

operations

2) Improves monetary transmission mechanism3) Fund based income and profitability


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MONETARY FISCAL INTERFACE

MONETARY POLICY- Economic policy of

govt. relating to currency and credit money.

FISCAL POLICY- Economic policy of govt.relating to taxation , expenditure, borrowing

and management of public debt in an economy


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RBI helps the govt .in controlling

fiscal deficit


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COMMUNICATION POLICY

RBI has transformed functionally and

structurally to the changing needs and

external needs through appropriate policyresponses.

UNTIL1991- Focus on healthy interaction

with the press to highlight the transparentmanner in which the RBI conducted with

central banking.


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AFTER 1991Well designed communication

policy with features like-

Transparency

Timeliness

Credibility

RBI uses website for dissemination of

information.

Solicits feedback on important issues placed

on its website


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CONCLUSION

The RBI presently in its seventieth year, has

had a fair degree of success in achieving the

twin objective of growth with stability. Controls all the monetary and fiscal policies

inside the country .

Provides legal framework to the local andmultinational banks.

Regulates issue of banks

Operates the currency and credit system

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