BANK MANAGEMENT

ASSIGNMENT
Reserve Bank of India
The ​Reserve Bank of India​ (​RBI​) is India's ​central bank​, which controls the issue and ​supply​ of
the ​Indian rupee​. RBI is the regulator of the entire ​Banking in India​. RBI plays an important part
in the Development Strategy of the ​Government of India​.
RBI regulates commercial banks and non-banking finance companies working in India. It serves
as the leader of the banking system and the money market. It regulates money supply and credit
in the country.

Powers of RBI
The RBI carries out India's monetary policy and exercises supervision and control over banks
and non-banking finance companies in India. RBI was set up in 1935 under the Reserve Bank of
India Act,1934.
Roles and Responsibility of RBI
Monetary Authority

The Reserve Bank of India constantly works towards keeping inflation under check and ensuring
adequate supply of liquidity for the productive sector as also towards financial stability.

Supervisor of the Financial System

Prescribes regulations for sound functioning of banks and financial institutions, including
non-banking finance companies

- Promotes best practices in risk management and corporate governance to protect depositors'
interest and to enhance public confidence in the financial system of the country

- Encourages use of technology in banks to provide cost-effective service to consumers.

Issuer of Currency

Ensures good quality coins and currency notes in adequate quantity

- Mops up notes and coins unfit for circulation

- Advises the Government on designing of currency notes with the latest security features.
Manager of Foreign Exchange

Formulates policies to facilitate external trade and payments, facilitates foreign investments in
India and Indian investments abroad and promotes orderly development of foreign exchange
markets.

Banker to the Government

Maintains accounts of central and state governments. Performs merchant banking function for
the central and the state governments

- Encourages development and orderly functioning of Government securities market

- Advises central and state governments in better cash management.

Payment Systems

Work towards stablishment of modern, robust, efficient, secure and integrated payment and
settlement system for the country.

Bankers' Bank

Ensures adequate liquidity in the financial system and in individual banks, on a daily basis

- Performs lender of the last resort function.

Developmental Role

Performs a wide range of functions to support national objectives such as ensuring orderly
growth and development of financial markets and institutions, creating institutions to serve
specialised financial needs and extending the organised financial sector to all parts of the
economy.

Under Research

Serves as the primary source of information on Indian economy and financial system

- Analyses the issues and problems affecting the Indian economy

- Renders advice for policy formulation and shaping monetary, banking and financial policies

- Prepares the Bank's publications

- Warehouses data to enable decision-making.

Lender of last resort

RBI acts as the lender of last resort by granting accommodation to commercial banks and others
in the form of collateral advances and re-discounts. This facility can be availed of by banks at
bank rate and commercial rate.

Bank of central clearance

RBI acts as the clearing agent for banks to facilitate clearing of cheques and settle mutual claims.
Clearing houses are maintained for these purposes. RBI also acts as the regulator of various
payment systems and ​payment cards​ linked to ​digital banking​.

The overall responsibilities of RBI can be consolidated as

a. Protecting the interests of customers
b. Orderly development and conduct of the banking operations
c. Fostering the health of the banking system and
d. Ensuring financial stability