2.  Established in April 1935 under the RESERVE BANK OF
INDIAN ACT 1934.
 Head Quarters – MUMBAI
 The Reserve Bank of India is the central banking institution of
India and controls the monetary policy of the rupee as well
as currency reserves.
 Present Governor – PRaghuram rajan.

3. History Of RBI
 It was set up on the recommendations of Hilton Young Commission
 It was started as share-holders bank with a paid up capital of 5 crores
 Initially it was located in Kolkata
 It moved to Mumbai in 1937
 Initially it was privately owned
 Since 1949, the RBI is fully owned by the Government of India.
 Its First governor was Sir Osborne A.Smith
 The First Indian Governor was “Sir Chintaman D.Deshmukh
 It was set up on the recommendations of Hilton Young Commission
 It was started as share-holders bank with a paid up capital of 5 crores
 Initially it was located in Kolkata
 It moved to Mumbai in 1937
 Initially it was privately owned
 Since 1949, the RBI is fully owned by the Government of India.
 The First Indian Governor was “Sir Chintaman D.Deshmukh

4. Reserve Bank
Commercial Bank
-Public Sector Bank
-Private Sector bank
-Regional Rural Bank
Co-operative Bank
-State Co-op bank
-Central Co-op Bank
-Primary Co-op Soc

5.  Regulator and supervisor of the financial system
 Manager of Exchange control
 Issuer of currency
 Banker to the Government
 Bank to banks: maintains banking accounts of the scheduled banks

6.  The main objectives for establishment of RBI as the central bank of India were as follows :
 To manage the Monetary and credit system of the country
 To stabilize internal and external value of rupee
 For balanced and systematic development of banking in the country
 For the development of organized money market in the country
 For proper arrangement of agriculture finance
 For proper arrangement of industrial finance
 For proper management of public debt
 To establish monetary relations with other countries of the world and international financial
institutions
 For centralization of cash reserves of commercial banks
 To maintain balance between demand and supply of currency

7. Related Functions
 RBI also regulates the opening / installation of ATM
 RBI regulates the opening of branches by banks
 It ensures that all the N.B.F.C follow the KYC Guidelines
 Fresh currency notes for ATM are supplied by RBI
 Banker to the Government: Performs all banking function for the central and state
governments and also act as their banker
 The reserve bank of India also regulates the trade of gold. Currently 17 banks are involved in
the trade of gold in India RBI has invited applications from more banks for direct import of gold
to curb illegal trade in gold and increase competition in the market
 It issues guidelines and directions for the commercial banks

8. • Has 27 regional offices.
• Has five training establishments
• College of Agricultural Banking and Reserve Bank of India Staff College – Pune.
• National Institute for Bank Management- Pune.
• Indira Gandhi Institute for Development and Research Mumbai.
• Institute for Development and Research in Banking Technology (IDRBT)- Hyderabad.
SUBSIDIARIES
• Deposit Insurance and Credit Guarantee Corporation of India(DICGC).
• Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL).
• Regional offices of RBI

9. • Financial supervision.
• Monetary management.
• Issue of currency.
• Banker to government.
• Banker to bank.
• Formulate monetary policy.
• Financial regulation and management.
• Manager of foreign exchange.
• Development role.

10.  As the regulator and the supervisor of the banking system, the Reserve
Bank has a critical role to play in ensuring the system’s safety and
soundness on an ongoing basis.
 The objective of this function is to protect the interest of depositors
through an effective prudential regulatory framework for orderly
development and conduct of banking operations, and to maintain
overall financial stability through various policy measures.

11. ROLE OF RBI IN INFLATION CONTROL
 Inflation arises when the demand increases and there is a shortage
of supply There are two policies in the hands of the RBI.
 Monetary Policy: It includes the interest rates. When the bank
increases the interest rates than there is reduction in the borrowers
and people try to save more as the rate of interest has increased.
 Fiscal Policy: It is related to direct taxes and government spending.
When direct taxes increased and government spending increased
than the disposable Income of the people reduces and hence the
demand reduces.

12. MARGINAL STANDING FACILITY
 The rate at which the scheduled banks could borrow funds from the
RBI overnight, against the approved government securities is termed
as MSF.
 Reserve Bank of India in its monetary policy (2011-12) has defined
the term Marginal Standing Facility rate as the one, under which
scheduled banks could borrow up to 2 % of their respective Net
Demand and time Liabilities funds overnight from the Reserve Bank
of India (RBI) against approved government securities.
 And the present rate is 8.75%

13.  Central bank plays important role in achieving economic growth of a developing
country
 It promotes economic growth with stability
 It helps in attaining full employment balance of payment disequilibrium and in
stabilizing exchange rate
 RBI is an autonomous body promoted by the government of India and is
headquartered at Mumbai
 RBI is an autonomous body promoted by the government of India and is
headquartered at Mumbai treasury foreign exchange movements and is also the
primary regulator for banking and nonbanking financial institutions
 The RBI operates a number of government mints that produce currency and coins