Introduction Of Reserve Bank Of India
The
Reserve Bank of India is India's central bank. It is the apex monetary
institution which supervises, regulates controls and develops the monetary and
financial system of the country. The Reserve bank was established on April 1,
1935 under the Reserve Bank of India Act, 1934. Initially, it was constituted
as a private share- holders* bank with a fully paid-up capital of Rs. 5 crore.
But, it was nationalized on January 1, 1949.
Management
The
management of the Reserve Bank is under the control of Central Board of
Directors consisting of 20 members:
(a) the
executive head of the Bank is called Governor who is assisted by four Deputy
Governors. They are appointed by the Government of India for a period of five years.
The head office of the Reserve Bank is at Bombay,
(b) There are four local boards at Delhi, Kolkata, Chennai
and Mumbai representing four regional areas, i.e., northern,
eastern, southern and western respectively. These local boards are advisory in nature
and the Government of India nominates one member each from these boards to the
Central Board.
(c) There
are ten directors from various fields and one government official from the
Ministry of Finance.
The
Reserve Bank of India Act, 1934 requires that there must be at least six
meetings in a year and the gap between two meetings must not exceed three
months. The Governor of the Reserve Bank can call a meeting of the Central
Board whenever he feels it necessary. The Governor and the Deputy Governors are
full-time officials of the Reserve Bank and are paid prescribed salaries and
allowances. Other directors are part-time officials and are given fare and
allowance to participate in the meetings.
Organization
Organisationally,
the Reserve Bank operates through various departments. They are:
1. Issue Department:
Its main
function is to issue and distribute the paper currency.
2. Banking Department:
This
department (a) deals with the government transactions, manages public debt and
arranges for the transfer of government funds ; (b) maintains the cash reserves
of the scheduled banks, provides financial accommodation to the banks and
functions as a clearing house.
3. Department of Banking Development:
It aims at
expanding banking facilities in unbanked and rural areas.
4. Department of Banking Operations:
Its
function is to supervise, regulate and control the working of the banking
institutions in the country. It grants licences for opening new banks or the
new branches of the existing banks.
5. Agricultural Credit Department:
It deals
with the problems of agricultural credit and provides facilities of rural
credit to state governments and state cooperatives.
6. Industrial Finance Department:
Its main
objective is to provide financial help to the small and medium scale
industries.
7. Non-Banking Companies Department:
It
supervises the activities of non-banking companies and financial institutions
in the country
8. Exchange Control Department:
It
conducts the business of sale and purchase of foreign exchange.
9. Legal Department:
It
provides advice to various departments on legal issues. It also gives legal
advice on the implementation of banking laws in the country.
10. Department of Research and Statistics:
The
objective of this department is (a) to conduct research on problems relating to
money, credit, finance, production, etc., (b) to collect important statistics
relating to various aspects of the economy; and (c) publish these statistics.
11. Department of Planning and Reorganization:
It deals
with the formulation of new plans or reorganization of existing policies for
making them more effective.
12. Economic Department:
It is
concerned with framing proper banking policies for better implementation of
economic policies of the government.
13. Inspection Department:
It
undertakes the function of inspecting various offices of the commercial banks.
14. Department of Accounts and Expenditure:
It keeps
proper records of all receipts and expenditures of the Reserve Bank.
15. RBI Services Board:
It deals
with the selection of new employees, for different posts in the Reserve Bank.
16. Department of Supervision:
A new department,
i.e., Department of Supervision, was set up on December 22, 1993 for the
supervision of commercial banks
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