RESERVE BANK OF INDIA

(RBI)
ROLE OF RBI
 BANKING INDUSTRY
• Banks work by paying its customers to lend them
money. When a person deposits money into their bank
account, the bank can then lend other people that
money. The depositing customer gains a small amount
of money in return (interest on savings), and the
lending customer pays a larger amount of money to the
bank in return (interest on loans). To make money for
itself, the bank keeps the difference.
 INTRODUCTION
•The reserve bank of india is india’s central banking
instituations which control monetary policy of the indian
rupee.
•The RBI plays an Important part in the strategy of the
government of india.
•The RbI is the backbone of indian Economy.
•If plays an important role in strength developing an
expending the countries economic an financial structure.
•It is the top bank of indian banking system.
 HISTORY
 It started on 1st april 1935 in accordance with the RBI Act 1934.
 Initially it was located in kolkata.
 It move to mumbai in the year 1937.
 It was the 1st bank to be nationalized in 1949.
 The Bank was constituted to:-
 Regulate the issue of banknotes
 Maintain reserves with a view to securing monetary
stability and
 To operate the credit and currency system of the country to its
advantage.
CURRENT ROLE OF RBI IN INDIAN BANKING
SYSTEM
I. Monetary Authority
II. The issuer of currency
III. The issuer of banking licence
IV. Banker’s to governments
V. Banker’s bank
VI. Banker’s and debt manager of government
VII. Act as clearing house
VIII. Manager of foreign exchange
IX. Regulatory of economy
X. Developmental role
1. MONETARY AUTHORITY- It control the supply of money in
the economy to stabilize exchange rates maintain healthy,
BOP, financial stability, strength of banking system etc

2.THE ISSUER OF CURRENCY- The objective is to maintain

the currency and credit system of the country to maintain
reserves.

3. THE ISSUER OF BANKING LICENCE- As per sec.22 of

banking regulation act, every bank has to obtain a banking
license from RBI to conduct banking business in India.
4. BANKER’S TO GOVERNMENTS- It acts as a banker both to the
central and the state governments. It provides short term credit, it
manages all new issues of government loans, servicing the government
debt outstanding and government securities.

5. BANKER’S BANK- RBI is the bank of all banks in India as it

provides the loan to bank/banker’s accept the deposited of bank and
rediscounts the bills of banks.

6. BANKER’S AND DEBT MANAGER OF GOVERNMENT- RBI keeps

deposits of government free of interest, receives and makes payment
carry exchange remittance and help to float new loans and manage
public debt, act as on advisor to government.
7. ACT AS CLEARING HOUSE- For statement of banking
transaction RBI manage 14 clearing house. It provide the
exchange of instruments and processing of the payment
introduction.
8. MANAGER OF FOREIGN EXCHANGE- It acts as a
custodian of FOREX. It enforces the provision of FEMA.
RBI buys and sales foreign currencies to maintain the
exchange rate of Indian rupees v/s foreign currencies.
9. REGULATORY OF ECONOMY- It controls the money
supply in the system, monitors different key indicators like
GDP, inflation etc.
10. DEVELOPMENTAL ROLE- This role includes
the development of the quality of banking system in
India and ensuring that credit is available to the
productive sector of the economy.
Organization Structure
 CONCLUSION RELATED TO NATION
• The central bank of any country executes many functions such as
overseeing monetary policy, issuing currency, managing foreign
exchange, working as a bank for government and as a banker of
scheduled commercial banks. It also works for overall economic
growth of the country. The preamble of the Reserve Bank of India
describes its main functions as:
• ..to regulate the issue of Bank Notes and keeping of reserves
with a view to securing monetary stability in India and
generally to operate the currency and credit system of the
country to its advantage.
THANK YOU
ISHITA BHAGAT(71702)
POOJA PRIYA(71714)