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Reserve Bank of India – Function & Working

The Reserve Bank of India (RBI) is the India’s Central Bank .RBI was established on Apr 1 1935 under RBI Regulatory Act.. It is the regulator of the entire banking in India.

RBI – Reserve Bank Of India

RBI Play an Important role in the development Strategy of the government of India. RBI Control overall issues and supply of the Indian Rupee. RBI as the leader of the Indian economy market and as the India’s Central Bank

Function & Working of Reserve Bank of India

The function of the reserve bank of India can be categorised as follow:-

•Monetary Policy – The key role of Central Bank to conduct monetary policy to achieve price Stability and to help manage economic fluctuations. RBI Conduct monetary policy by adjusting the Supply of money .

•Regulation and Supervision of the banking and Non – banking financial institutions including credit information Companies –

•Regulation of Money , Forex and government securities markets as also certain financial derivatives

•Debt and Cash management for central and State government – It Involves issue of new rupee loan , payment of interest and repayment of these loans and other operational matters such as debt certificate and their registration. In this process Reserve bank of India act as a cash manager to the central and state government.

•Management of foreign exchange reserves – Foreign exchange reserve are assets held in reserve by a central bank in foreign currencies. These reserve are used to back liabilities and influence monetary policy. RBI includes any Foreign money held by a central bank of India.

•Foreign exchange management – current and capital account management – RBI has an important role to play in regulating & managing Foreign Exchange of the country. RBI manages forex and gold reserves of the nation. The foreign exchange rate reflects the demand for and supply of foreign exchange arising from trade and capital transactions.
•Bankers to Bank – Maintaining the Balance of Scheduled bank and deposit of non – scheduled and cooperation bank.
2) Rediscounting of eligible bill for granting loan and advance to schedule commercial bank , state cooperative bank , RRB and financial institutions.
(3) The function are carried out by the deposit account department at various office.

•Banker to the central and State government – (1) Reserve Bank is the banker to the central government statutority and to the state government by virtue of agreement.
(2) RBI provide a full range of Banking service to central / State government such as acceptance of money , withdrawal of funds by cheque , recipt and collection of payment to Government and transfer of funds.
(3) A large no of branches and agency bank and treasury agencies also undertake Government business on behalf of RBI .
(4) The Government revenue collected through agency bank / treasury agencies are remitted to RBI in due course.

•Oversight of the Payment and Settlement system – Oversights is defined as a central bank function whereby the objective of safety and efficiency are promoted by monitoring existing and planned system,assessing them against these objectives and where necessary inducing change in the report of Central bank oversight of payment and settlement sustem.

•Currency Management – The Reserve bank if India play important role in currentcy management from the Reserve bank of India Act ,1934. The Government on the advise of Reserve bank , decides on various denomination of banknotes to be issued. The Reserve bank also co – ordinates with the Government in the designing of banknotes, including the security features.

•Developnment Role – This part includes the development of the standard of the banking system in India and guaranteeing that credit is obtainable to the productive areas of the economy. It similarly includes establishing organizations designed to shape the country financial set-up. It also supports in expanding Access to inexpensive financial services and endorsing Financial learnings and Literacy.

•Reserch and Statistics – The department mandate is to manage comprehensive statistical system relating to monetary, banking , corporate , and the external sector conduct structured survey and carry out specialised statistical analysis and fore casting.

Organisation of the Reserve Bank of India

• Central Board of Director
• Governer
• Deputy Governor
• Executive Director
• Principal Chief General Manager
• Chief General Manager
• General Managers
• Deputy General Managers
• Assistant General Managers
• Manager
• Assistant Manager
• Support Staff

I think it’s enough to understand RBI function and working. Further information, stay connected with us . Stay well , Stay Safe.
Also Read – List Of Constitutional Bodies In India
Bharat Ratna List Pdf Download


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