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Reserve Bank of India

The Reserve Bank of India or RBI is the apex bank of India. It is the regulator of all the banks operating in India. RBI has 22 regional offices and most of them are located in state capitals.

About Reserve Bank of India

The Reserve Bank of India was founded in 1935. It is the central bank of India and regulates the fiscal policy of the Rupee and the U.S. dollar currency reserves of India. It was initially set up in Kolkata but later on the office was shifted to Mumbai in 1937.

At the time of its inception, the RBI was privately held. However, after nationalization in 1949, the Indian government became the owner of the bank. The principal function of the Reserve Bank of India is to control the issue of banknotes and maintenance of reserves with an objective to ensure financial stability in India and typically to regulate the currency and credit system of India for its benefit.

RBI is run by a central board of directors. The government of India appoints this board to handle the day to day matters of the bank. The appointment is performed in accordance with the Reserve Bank of India Act. These directors are nominated/appointed for a period of 4 years. The board comprises both official and non-official directors. The task of these directors is to monitor and guide the matters of the bank. In addition, there is also a local board to give advice to the central board and the local board has the following features:

  1. There is one board each for the four regions of India in Kolkata, Mumbai, New Delhi and Chennai
  2. The board comprises 5 members
  3. The board members are appointed for a term of four years by the Central Government

Duvvuri Subbarao is the present governor of RBI.

The local board works as a representative of the interests of indigenous and regional cooperative banks. There is another board which is the financial supervision board (BFS). It was set up in 1994 as a group of the central board of directors of the RBI. The board is chaired by the Governor and the main goal of the board for financial supervision is to carry out monitoring of the financial industry consisting of financial institutions, commercial banks and non-banking finance companies. Some of the steps taken by the BFS are given below:

  1. Commencing off-site inspection
  2. Reorganization of the method of bank checks
  3. Reinforcement of the internal securities of monitored institutions
  4. Reinforcement of the function of statutory auditors

Presently, RBI is concentrating on the following issues:

  1. Consolidated accounting
  2. Monitoring of financial institutions
  3. Variation in evaluations of non-performing assets
  4. Legal matters in bank scams
  5. Decision-making ranking pattern for banks

Legal structure of RBI

RBI is governed by the following acts:

  1. Reserve Bank of India Act, 1934
  2. Public Debt Act, 1944/Government Securities Act (planned)
  3. Banking Regulation Act, 1949
  4. Indian Coinage Act, 1906
  5. Securities Contract (Regulation) Act, 1956
  6. Payment and Settlement Systems Act, 2007
  7. Foreign Exchange Regulation Act, 1973/Foreign Exchange Management Act, 1999
  8. Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980
  9. Companies Act, 1956
  10. Banking Secrecy Act
  11. Bankers' Books Evidence Act
  12. State Bank of India Act, 1954
  13. Negotiable Instruments Act, 1881
  14. The Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993
  15. The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003
  16. National Housing Bank Act
  17. Deposit Insurance and Credit Guarantee Corporation Act
  18. National Bank for Agriculture and Rural Development Act

Principal functions of RBI

Given below are the main functions of the Reserve Bank of India:

  1. Monetary Authority
  2. Manager and controller of the financial system
  3. Issuer of currency/banknotes
  4. Supervisor of foreign exchange
  5. Function in economic growth
  6. Banker to government and banker to banks

Training colleges of RBI

Given below are the names of the training colleges of RBI:

  1. Bankers Training College
  2. College of Agricultural Banking
  3. National Institute for Bank Management
  4. Reserve Bank of India Staff College
  5. Institute for Development and Research in Banking Technology (IDRBT)
  6. Indira Gandhi Institute for Development Research (IGIDR)

Subsidiaries of RBI

Given below are the names of the subsidiaries of RBI:

  1. Deposit Insurance and Credit Guarantee Corporation of India (DICGC)
  2. National Housing Bank (NHB)
  3. National Bank for Agriculture and Rural Development (NABARD)
  4. Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)

Reserve Bank of India Contact Details

Reserve Bank of India
Central Office
P.O. Box 10007
Mumbai 400 001