Reserve Bank Of India (RBI) Question For Bank Exam
RBI – It stands for the Reserve Bank Of India which is the centralized body of all the banks in India. The British rule established the RBI actin 1934 and commencement/establishment of the bank was did on 1st April 1935.
After India’s independence on 15th August 1947, the nationalization of the RBI was done on January 1st,1949. Its head Office present in Mumbai and was in Kolkata before 1937.
The first time the registered capital of RBI was five crores and was divided into five lakh shares of 100/- each. It plays a vital role in the development strategy of the Government Of India. RBI is helpful in maintaining financial policies for the country and is the leading member of the Alliance for Financial Inclusion (AFI).
The committee which rules and regulations related to the establishment of RBI is Hilton Young committee. The official name is Royal Commission on Indian Currency and Finance. RBI is fully owned government organization. RBI also acted as the central bank of two either countries which are Burma in 1937-1942 and Pakistan in 1947-1948.
The committee which rules and regulations related to the establishment of RBI is Hilton Young committee. The official name is Royal Commission on Indian Currency and Finance. RBI is fully owned government organization.
RBI also acted as the central bank of two either countries which are Burma in 1937-1942 and Pakistan in 1947-1948.
The British rule established the RBI slogan seal as Lion and Palm Tree nut later in 1937 it was changed as Tiger and Palm Tree and is till now. The present Governor of RBI is Mr.RaghuRam Rajan.
Concept of RBI –
When bank crisis then first Prime Minister Mr.Jawahar Lal Nehru decided that there should be one central bank above all the banks, and this was the concept which was copied by England. And this report publishes by RBI is an Annual Report on Currency and Finance.
Structure Of RBI:-
The CBD, which stands for central board of director, is the head committee/authority of the RBI. The further divided into two parts:-
I) Official Directors consist of 5 members for a 5-year term of which 4 are Deputy Governor, and 1 is Governor.
II) NonOfficial Directors composed of 16 members of which 4 are local board directors who represent zones, ten specialist directors and two central government employees(witnessing leaders). Overall total 21 members are present in the CBD.
The RBI has four zonal offices in Mumbai, Delhi, Kolkata and Chennai and 19 regional offices headed by regional directors over the capitals of the Indian states and also nine sub-offices in Dehradun, Shimla, etc. controlled by the general manager, assistant manager, deputy manager.
The bank has two preparing schools for its officers likewise, viz. Reserve Bank Staff College at Chennai and College of Agricultural Banking at Pune. There are three self-governing foundations National Institute of Bank Management (NIBM), Indira Gandhi Institute for Development Research (IGIDR), Institute for Development and Research in Banking Technology (IDRBT).
Functions Of RBI –
- Financial Supervision: – This feature is performed under the guidance of the Board for Financial Supervision (BFS). The primary objective is to undertake consolidated supervision of the financial sector comprising commercial banks, money related foundations, and non-keeping money FINANCE organizations.
- Monetary Policy: – This is the policy formulated by RBI, review by RBI on a quarterly basis and made by monetary policy Department for inflow and outflow of cash and also controls the stability of price i.e. inflation and deflation in the country.
- Banker to the bank: – It is the banker to all the banks. When the banks need money RBI helps the bank and provide the money and also offers advice if the bank needs. It maintains accounts of all the comprised banks within it.
- Banker to the Government: – When the government needs money RBI provides the government with the money and advises. RBI gives higher amounts of the laws or policies established by the government to the government.
- The issuer of Currency: – The currency is issued by RBI from 1935. The bank problems and exchanges currency notes and coins and also destroys the same when they are not fit for circulation. RBI maintains the financial structure of the nation with the goal that it can accomplish the objective of price stability as well as economic development because both goals are diverse in nature. For printing of notes, the Security Printing and Minting Corporation of India Limited (SPMCIL), an entirely possessed organization of the Government of India, has set up printing presses at Nashik, Maharashtra, and Dewas, Madhya Pradesh. The bank issue the currency to the general public, government and the banks to perform day to day activities.
1 Rs note and coin are issued by Finance Ministry while no printing of Rs 1 and two note did but the exchange is possible. RBI can print the note till 500 and 10000, but the coins can be of 1000 and this power is given by Government Of India by RBI Act 1934.
- Detection Of Fake Currency: – RBI detects the fake or wrong notes. Th spoiled notes are recycled with a machine of 5 crores and before this machine, the records were burnt. A web page which is used to recognize fake currency is “Pehchano Paise Ki Boli Kyun ki paisa bolta hai.” Its URL is .www.paisaboltahai.rbi.org.in.
- Currency Chest: – RBI has given the power to scheduled commercial banks that on behalf of RBI these banks can store or issue money and that warehouses, where the currency is stored, is called as currency chest.
RBI Monetary Policies:-
The monetary policy of RBI is formulated by RBI and the department is MPD (Monetary Policy Department). the function of MPD is to bring price stability and maintain inflow and outflow of cash.
- VRR (Variable Reserve Ratio): – These are those ratios whose amount are always fluctuating or changing. Banks salary is “total deposits” or “net demand and time liabilities”. Total deposits are fluctuating calculated on daily basis and checking on a quarterly basis. It is compulsory for all the banks to give some amount of % of total deposits to RBI so that id the bank is in problem RBI can help the banks.
- CRR (Cash Reserve Ratio): – It is compulsory for all the banks that 4% of the total deposits is to be kept with RBI in the current account, and no interest is paid on it, This amount is used when the bank becomes insolvent. CRR is maintained on a daily basis at 99% before it was 70%. CRR is always maintained in cash, and this amount is distributed to the customers and importance is given to the people who have mounted<2000.
- SLR(Statutory Liquidity Ratio): – It is compulsory for all the banks to keep 21.50% of their total deposits with them only for maintaining their day to day liquidity or for an unexpected event to happen. SLR can be maintained in the form of gold, silver, cash or securities.
- Bank rate: -The premium rate the RBI charges the banks, for this reason, is called bank rate or Repo Rate. If the RBI wants to increase the liquidity and cash supply in the business sector, it will lower the bank rate and if RBI intends to reduce the liquidity and money supply in the system. The current bank rate is 8.5%.
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