rbi session

8/7/2019 RBI Session

1/37


2/37

History of Central Banking in India

1835- Uniform Currency- Silver, Presidency Bank- East India Company

1862- Taken Over by Government

1870- Gold Exchange Standard

1921- Imperial Bank of India was Established = 3 Presidency Bank, but

Not Permitted to Print the Notes and Do foreign ExchangeTransaction

1926- Hilton Committee Recommended Central Bank in the Country

1934- Bill Passed to Form RBI


3/37


4/37


5/37


6/37


7/37


8/37


9/37


10/37


11/37


12/37


13/37


14/37


15/37


16/37


17/37


18/37


19/37


20/37


21/37


22/37


23/37


24/37


25/37


26/37


27/37

Main Functions of RBI

Bank of issue

Banker to Government

Bankers Bank & Lender of LastResort

Controller of credit

Custodian of foreign reserves

Promotional functions


28/37

Bank of Issue (Under Sec 22)

RBI has sole right to issue One Rupees Notes and

small coins in country as agent of Government.

RBI has separate Issue Department to issue currencynotes.

RBI maintain Minimum Reserve in form of Gold and

Foreign Exchange Reserve of which almost 55%

should be in Gold.


29/37

Banker to Government

RBI is banker, agent and advisor of Central Government

and all State Government in India.

RBI helps the Government to float new loans and to

manage public debt.

RBI makes loans and advances to the States and local

authorities.


30/37

Bankers Bank & Lender of Last Resort

RBI maintains banking accounts of all schedule

banks.

Every schedule bank have to keep cash reserve a

fix percentage of their aggregate deposit liabilities .

Banks always expect for help from RBI in time of

banking crisis.


31/37

Controller of Credit

RBI holds the cash reserves of all schedule banks.

It holds credit operations of banks through quantities

RBI has power to ask bank or whole banking system

not to lend particular group or person.

Every bank have to get license from RBI for banking

operation. RBI can also cancel this license.

Every bank gives weekly return showing assets and

liabilities in details .


32/37

Custodian of Foreign Reserves

RBI responsible to maintain official rate of exchange

as according terms of I.M.F.

RBI reserves the international currency.

RBI observes relationship of Indian Currency with

other International currency.


33/37

Promotional Functions

RBI ask banks and financing agencies to promote rural

and semi-urban areas by financing (funding ).

RBI setup directly or indirectly some institutions like :

Deposit Insurance Corporation ( 1962 )

Industrial Development Bank ( 1964 )

Unit Trust of India ( 1964 )

Industrial Reconstruction Corp. of India ( 1972 )

Agricultural Refinance Corporation ( 1963 )

RBI promotes villagers for saving and route this money

as short term credit to agriculture.


34/37

CAMEL Approach to Evaluate the Indian Banks

recommended by The Padmanabhan Working Group on ascale of 1-5.

Capital Adequacy

Asset Quality

Management

Earning

Liquidity


35/37


36/37


37/37

rbi session

Documents