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RBI ACT.pptx FOR BBA AND MBA STUDENTS PPT
- 2. Introduction It is the Central Bank of India established in 1934 under the RESERVE BANK OF INDIA ACT 1934. Its head quarter is in Mumbai (Maharashtra). Its present governor is Mr. Shaktikanta Das. At present, RBI comprises of 4 Zonal offices, 19 Regional offices as well as 11 Sub-Regional offices.
- 3. Formation Of RBI There was Imperial Bank Of India before RBI & this bank was working as Central Bank. The year 1913 to 1918 known as Banking Crisis, hence CHEMBERLIN COMMISSION was setup & recommended CENTRAL BANK. In the year 1926, HILTON YOUNG COMMISSION (Royal Commission on Indian Currency and Finance) recommended that Indian should have CENTRAL BANK, on this recommendation RBI ACT 1934 passed. By RBI ACT 1934, RESERVE BANK OF INDIA established in 1935. RBI Nationalized on Jan 1st , 1949.
- 4. Preamble The Preamble of the Reserve Bank Of India describes the basic objectives of the Reserve Bank as to regulate the issue of Bank Notes and keeping of reserve with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantages.
- 5. Objectives and Reasons For Establishment of RBI To manage the Monetary and Credit system of country. To stabilize internal and external value of money. For balanced and systematic development of banking in the country. For the proper arrangement of Agricultural finance. To establish monetary relations with other countries of the world and international financial institutions. For centralization of cash reserves. To maintain balance between demand and supply of currency.
- 6. The Key Roles Of RBI Regulator and supervisor of the financial system. Manager of Exchange control. Issuer of currency. Banker to the Government. Bank to banks: maintain banking accounts of the scheduled banks.
- 7. Functions of RBI Supervisory functions Promotional functions Non- Monetar y functions Note issue Bankers to the Government Bankers bank Custodian of foreign reserves Controller of credit Bank rate Open Market Operations CRR and SLR Monetar y functions
- 8. Bankers to the Government Keeping the cash balances of the Government as deposits free of interest. Receiving and making payments on behalf of the Govt. Helping both Central and State Govt. Float new loans and manage public debt. Acting as advisor to the Govt. on all monetary and banking matters.
- 9. Bankers bank Apex banking institution. Controls the banking activities and credit system in India. It provides financial assistance to scheduled banks by rediscounting eligible securities.
- 10. Custodian of Foreign Reserves Most of the countries, central bank is with the task of managing their foreign reserves. In India, RBI has maintain the rate of exchange. According to RBI Act, 1934 the bank was required to buy and sell at fixed rates. The bank has licensed several banks as authorized dealers in foreign exchanges.
- 11. Controller of Credit Bank Rate Sec.49 of RBI Act, empowers the Reserve Bank to publish the bank rate from time-to-time. Standard rates which is prepared to buy or rediscount bills of exchange or other commercial papers eligible for purchase under his act. 6.00% p.a(w.e.f close of business of 4/4/2019)
- 12. Open market operations The purchase and sale of Govt. securities by the RBI from/to the public and bank on its own account. Section 17(8) provides this right to RBI. To provide seasonal finance to commercial banks by purchase of securities from them.
- 13. CRR Every scheduled bank should maintain a minimum balance with RBI. It was 5% on demand deposits and 2% on time deposits. Its ratio is 4% SLR It is an another method of influencing the lending policies of commercial banks. Narasimham Committee recommended it was from 25 to 38%. RBI gradually reduces the SLR. Its current ratio was 19.5 %.
- 14. Non-Monetary Functions Supervisory Function RBI Act 1934 & than Banking Regulation Act 1949 have given wide range of powers to RBI to control over commercial banks. Section 22 of Banking Regulation Act 1949, every bank has to obtain a license from RBI carrying on banking business. Sanction of new branch or a new place of business.
- 15. Promotional Function It promotes banking habits. Extend banking facilities to rural and semi urban areas. Establish and promote new specialized financing agencies.
- 16. RBI Bank of India Scheduled Banks Non-Scheduled Banks State Cooperative Banks Commercial Banks Central Cooperative Banks and Primary Credit Societies Non-Scheduled Commercial Banks Foreign Banks Indian Banks Public Sector Banks Private Sector Scheduled Banks State Bank of India and its associates Nationalized Banks Regional Rural Banks
- 17. Organizational Structure Governor Deputy Governor Executive Director Principal Chief General Manager Chief General Manager General Manager Deputy General Manager Asstt. Deputy General Manager Manager Asstt. Managers Support Staff
- 18. Amendments 1960-1982 over 2,000 banks were liquidated or merged.
- 20. Thank You