1. RESERVE BANK OF INDIA
A.FIROZ
MBA

2. INTRODUCTION
 It is the central bank of India
 Established in 1 April 1935 under the reserve bank
of India act
 It head quarters is in Mumbai
 Its present governor is Dr. d.subbarao
 It was originally constituted as a shareholder’s
bank with a capital of Rs.5 crores. The entire share
capital was contributed private shareholders with
the exception of the nominal value of Rs 2.2 lakh
subscribed by the central bank
 After independence, the reserve bank of India was
nationalized.

3. Management
The management of RBI is vested with the central
board of directors comprising 20 members. The
board consist of the following members;
 One governor and four deputy governor appointed
by the central government
 Four directors nominated by the central
government one from each of the local board
 Ten directors nominated by the central government
 One government official nominated by the central
government

4. Functions of the reserve bank
 Note issue
 Banker to government
 Custodian of foreign exchange reserve
 banker’s bank
 Bank of settlement and clearance
 Information and research functions
 Lender of last resort
Controller of credit

5. R B I has the monopoly power to issue
currency notes of all denominations except
one rupee notes and coins. One rupee notes
notes and coins are issued by government of
India.

6. The reserve bank acts as a banker to
the central and state governments. The term
and conditions on which the reserve bank
acts as a banker to the governments are set
out in separate agreements entered into by
the reserve bank with the central and state
governments.

7. In India R B I is acting as custodian of foreign
exchange reserve. The reserve bank of India
has responsibility of maintain the external
value of the rupee. For this purpose, the bank
holds most of the nation's foreign exchange
reserve

8. RBI is acting as banker to commercial banks and
other financial institutions working in India. The
reserve bank of India has the responsibility for
developing an adequate and sound banking
system for catering to the needs of trade,
commerce and agriculture.
all commercial banks in India are
required to open an account with RBI. Every bank
wishing to commence banking business in India
most obtain a license from the reserve bank in
terms of section22 of the banking regulations
act.

9. As the reserve bank keeps the cash balance of
all commercial banks it is easy for the bank to
act as settlement bank or clearing house for
other banks.

10. The reserve bank undertakes collection and
dissemination of information and conducts
research in this field. The bank issues several
periodical publications, which attempt to
explain and assess the significance of
economic developments in the country

11. As a lender of the last resort, RBI provides
financial accommodation to the commercial
banks in times of financial crisis.

12. Control of credit is one of the most important
functions of RBI. RBI performs this task with twin
objectives of checking inflation and providing
sufficient credit for the economic development of
the country
following are the various weapons of credit
control used by RBI
o Bank rate policy
o Variable cash reserve ratio
o Variation of statutory liquidity ratio
o Open market operation