Reserve Bank of India – An Overview
: The Reserve Bank of India was established on April 1, 1935 under the Reserve Bank of India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Main objectives of the Reserve Bank is : “to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”
: The Reserve Bank’s affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India(RBI) Act 1934.
: The organization and management of RBI is vested on the Central Board of Directors. It is responsible for the management of RBI.Central Board of Directors consist of 20 members. It is constituted as follows. a) One Governor: It is the highest authority of RBI. He is appointed by the Government of India for a term of 5 years. He can be re-appointed for another term. b) Four Deputy Governors: Four deputy Governors are nominated by Central Govt. for a term of 5 years. c) Fifteen Directors: Other fifteen members of the Central Board are appointed by the Central Government. Out of these , four directors,one each from the four local Boards are nominated by the Government separately by the Central Government. The Central board of directors exercises all the powers of the bank. The Central Board should meet atleast six times in each year and at least once in three months. Usually, the Central Boardkeeps a meeting in March every year at New Delhi so as to discuss the budget with the Finance Minister after its presentation in parliament.
· Reserve Bank of India is the main monetary authority of the country. It formulates, implements and monitors the monetary policy and thereby plays a key role in maintaining price stability and ensuring adequate flow of credit to productive sectors. · RBI is the regulator and supervisor of the financial system in the country. It prescribes broad parameters of banking operations within which the country’s banking and financial system functions. · It manages the foreign exchange of the country. · Performs merchant banking function for the central and the state governments; also acts as their banker. · Maintains banking accounts of all scheduled banks. · Issues and exchanges or destroys currency and coins not fit for circulation.
National Housing Bank (NHB) National Housing Bank was set up on July 9, 1988 under the National Housing Bank Act, 1987 as a wholly-owned subsidiary of the Reserve Bank to act as an apex level institution for housing.
Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) The Reserve Bank established BRBNMPL in February 1995 as a wholly-owned subsidiary to augment the production of bank notes in India and to enable bridging of the gap between supply and demand for bank notes in the country. The BRBNMPL has been registered as a Public Limited Company under the Companies Act, 1956 with its Registered and Corporate Office situated at Bengaluru. The company manages two Presses, one at Mysore in Karnataka and the other at Salboni in West Bengal.
National Bank for Agriculture and Rural Development (NABARD) National Bank of Agriculture and Rural Development (NABARD) is one of the subsidiaries where the majority stake is held by the Reserve Bank. NABARD is an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
Deposit Insurance and Credit Guarantee Corporation (DICGC) With a view to integrating the functions of deposit insurance and credit guarantee, the Deposit Insurance Corporation and Credit Guarantee Corporation of India were merged and the present Deposit Insurance and Credit Guarantee Corporation (DICGC) came into existence on July 15, 1978.Deposit Insurance and Credit Guarantee Corporation (DICGC), established under the DICGC Act 1961, is one of the wholly owned subsidiaries of the Reserve Bank. The DICGC insures all deposits (such as savings, fixed, current,and recurring deposits) with eligible banks except the following: 1) Deposits of the State Land Development Banks with the State cooperative bank;
2) Any amount due on account of of any deposit received outside India;
3) Any amount, which has been specifically exempted by the corporation with the previous approval of RBI. Every eligible bank depositor is insured upto a maximum of Rs.1,00,000(Rupees One Lakh) for both principal and interest amount held by him.