It is the apex institution which governs the complete banking
structure in India.
The Reserve Bank of India (RBI) is India's central
banking institution, which controls the monetary policy of
the Indian rupee.
The Reserve Bank of India was established on April 1, 1935
in accordance with the provisions of the Reserve Bank of
India Act, 1934.
The Central Office of the Reserve Bank was initially
established in Calcutta but was permanently moved to
Mumbai in 1937. The Central Office is where the Governor
sits and where policies are formulated.
Though originally privately owned, since nationalization in
1949, the Reserve Bank is fully owned by the Government
The general superintendence and direction of the RBI is
entrusted with the 21-member- Central Board of Directors
—the Governor(currently Raghuram Rajan), four Deputy
Governors, two Finance Ministry representative, ten
government-nominated directors to represent important
elements from India's economy, and four directors to
represent local boards headquartered at Mumbai, Kolkata,
Chennai and New Delhi.
6. The Preamble of the Reserve Bank of India describes the
basic functions of the Reserve Bank 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."
Central Board of Directors: The Central Board of Directors
is the main committee of the central bank. The Government of
India appoints the directors for a four-year term. The Board
consists of a governor, four deputy governors, fifteen directors
to represent the regional boards, two from the Ministry of
Finance and ten other directors from various fields.
Governors: The current Governor of RBI is Raghuram Rajan.
There are four deputy governors, Deputy Governor K C
Chakrabarty, Anand Sinha, H R Khan andUrjit Patel. Deputy
Governor K C Chakrabarty's term has been extended further
by 2 years. Subir Gokarn was replaced by Urjit Patel in
Supportive bodies: The Reserve Bank of India has ten regional
representations: North in New Delhi, South in Chennai, East in
Kolkata and West in Mumbai. The representations are formed by
five members, appointed for four years by the central
government and serve—beside the advice of the Central Board of
Directors—as a forum for regional banks and to deal with
delegated tasks from the central board. The institution has 22
The Board of Financial Supervision (BFS), formed in November
1994, serves as a CCBD committee to control the financial
The Tarapore committee was set up by the Reserve Bank of India
under the chairmanship of former RBI deputy governor S. S.
Tarapore to "lay the road map" to capital account convertibility.
Offices and branches: The Reserve Bank of India has four
zonal offices. It has 19 regional offices at most state capitals
and at a few major cities in India. Few of them are located
Ahmedabad, Bangalore, Bhopal,Bhubaneswar, Chandigarh,
Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kanp
ur, Kolkata, Lucknow, Mumbai, Nagpur, Patna,
and Thiruvananthapuram. It also has 9 sub-offices located
in Agartala, Dehradun, Gangtok, Kochi, Panaji, Raipur, Ran
chi, Shillong, Shimla and Srinagar.
12. The Reserve Bank of India performs this function under the guidance
of the Board for Financial Supervision (BFS). The Board was
constituted in November 1994 as a committee of the Central Board
of Directors of the Reserve Bank of India.
Some of the initiatives taken by BFS include:
restructuring of the system of bank inspections
introduction of off-site surveillance,
strengthening of the role of statutory auditors and
strengthening of the internal defences of supervised institutions.
supervision of financial institutions
legal issues in bank frauds
divergence in assessments of non-performing assets and
supervisory rating model for banks.
13. Monetary Authority
Formulates, implements and monitors the monetary policy.
Objective: maintaining price stability and ensuring adequate
flow of credit to productive sectors.
Regulator and supervisor of the financial system
Prescribes broad parameters of banking operations within which
the country's banking and financial system functions.
Objective: maintain public confidence in the system, protect
depositors' interest and provide cost-effective banking services to
Manager of Foreign Exchange
Manages the Foreign Exchange Management Act, 1999.
Objective: to facilitate external trade and payment and promote
orderly development and maintenance of foreign exchange
market in India.
14. Issuer of currency
Issues and exchanges or destroys currency and coins not fit
Objective: to give the public adequate quantity of supplies of
currency notes and coins and in good quality.
Performs a wide range of promotional functions to support
Banker to the Government: performs merchant banking
function for the central and the state governments; also acts as
Banker to banks: maintains banking accounts of all scheduled
Bank Rate (8.75%)
Cash reserve ratio (CRR) (4.00%)
Statutory Liquidity ratio (SLR) (23%)
Repo Rate and Reverse Repo Rate (7.75% & 6.75%)
Deposit Rate and Base Rate
Reserve Bank Rate
Marginal Standing Facility (MSF) (8.75%)