The Reserve Bank of India is the central bank of India. It was established in 1935 in Calcutta and was shifted to Bombay in 1937. Mumbai Reserve Bank of India was nationalized in 1949, and functions as banker to the commercial banks in India. Reserve Bank of India (RBI) also does commercial banking operations for central and state governments.
The head quarters of Reserve Bank of India is located in Central Office Building, Shahid Bhagat Singh Marg, Mumbai - 400 001. The Governor of Reserve Bank of India (presently Dr. Y.V. Reddy) sits in the Central Office Building. The four Deputy Governors, and seven Executive Directors are also housed in this building. All administrative and functional activities are held in this central office.
Functions of Reserve Bank of India
The Mumbai RBI performs regulatory, monetary, developmental, and treasury functions. These include:
- Regulatory function - Forms operational guidelines for commercial banks along which they perform their retail functions. This Reserve Bank does to provide cost-effective commercial banking services to its depositors and retail clients.
- Monetary function - Reserve Bank formulates and implements monetary measures to control the circulation of money in the economy. This cash flow is monitored by changing the cash reserve ratio of the commercial banks, and borrowing and lending rates.
- Currency circulation - The Reserve Bank ensures adequate supply of currency notes and coins in the economy.
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Old and damaged currency coins and notes are replaced by Reserve Bank.
- Development function - The Reserve Bank of India organizes developmental programs to educate depositors, investors, and commercial banks on various issues of national importance.
- The Reserve Bank of India is the banker of all nationalized and private Indian commercial banks.
- The RBI performs commercial banking operations for the central and state governments.
- Foreign Exchange Manager - The effective management of foreign exchange allows proper utilization of foreign currency for external trade and promote exports.
To function smoothly, RBI has set up 24 departments namely, Dept. of Monetary Policy, Dept. of Expenditure and Budgetary Control, Dept. of Currency Management, Dept. of External Investments and Operations, Dept. of Banking Supervision, Dept. of Government and Bank Accounts, Dept. of Banking Operations and Development, Dept. of Economic Analysis and Policy, Dept. of Non-Banking Supervision, Dept. of Administrative and Personnel Management, Dept. of Statistical Analysis and Computer Services, Dept. of Information Technology, Dept. of Foreign Exchange, Dept. of Internal Debt Management, Dept. of Financial Markets, Inspection Dept., Dept. of Urban Banks, Dept. of Credit and Rural Planning, Secretary's Dept., Premises Dept., Customer Care Dept. and Dept. of Human Resource Development.
The Reserve Bank of India was established to provide monetary stability through a credit and currency system either directly or through the retail chain of commercial banks in India.
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