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Tuesday, April 24, 2012

Reserve Bank of India (RBI)

42 comments

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RBI, India's Central Bank came into existence on 1stApril 1935 as a private share holders bank. Note : 1st Central Bank in the world : Rick's Bank Sweden in 1656. But in the light of unctions, Bank of England is the 1st Central Bank 1694.

Functions of RBI : 
  • Monopoly of Note issue
  • Banker, Adviser and Agent to the Govt. of India
  • Banker to Banks
  • Custodian of Foreign exchange and gold.
  • Re-discounts bills of exchange and hundis.
  • Lender of last Resort
  • Maintains stability of foreign value of Rupee.
  • Acts as clearing house
  • Credit control

Here are some important points to remember about RBI :

  • RBI's central office is in Mumbai.
  • RBI has 22 regional offices.
  • It was nationalized on 1st January 1949.
  • It prints Currency in 15 Languages.
  • Its predecessor was Imperial Bank of India (1921).
  • RBI came into existence on the recommendation  of Hilton Young (Royal) commission as per RBI act 1934.
  • It is the member bank of Asian Clearing Union (ACU) and IMF (International Monetary Fund).
  • RBI has Board of Directors with 21 (Governor and 4 Deputy Governors etc)
  • The present Governor of RBI is Raghuram Rajan.
    • Deputy Governors :
      • K.C.Chakravarthi
      • Urjit Patel
      • Anand Sinha
      • Harun Rashid Khan.
  • Currency notes are issued by RBI under "Minimum Reserve System 1957" with backing of Rs. 200 Cr Reserve (Gold : Rs. 115 Cr + Foreign Securities Rs. 85 Cr)
  • RBI Invests foreign exchange reserves in multi-currency, multi-market portfolios such as securities, other central banks and Bank of International Settlements (BIS) and deposits in foreign commercial banks. The yield on such investments is low.
  • RBI does not pay interest on Govt. deposits with it.
  • The following monetary instruments are in the hands of RBI to control credit and to bring economic stability in the economy :
    • Bank Rate : Rate of rediscount at which the RBI discounts the first class bills of exchange brought by the banks. 
    • Repo Rate : Injection of liquidity by the RBI is termed as " Repo Rate" . This was introduced in Dec. 1992 and Reverse Repo Rate in Nov. 1996. RBI buys Govt. Securities for a short period usually a fortnight, with an agreement to sell it later. Thus repo rate is a short-term money market instrument to stabilize short term liquidity in the economy.
    • Reverse Repo Rate 
      • Repo Rate is the rate at which the RBI lends to commercial banks where as the Reverse Repo Rate is the rate at which the RBI borrows from the commercial banks against securities for a very short period. 
      • Repo and Reverse Repo rates are used as policy instruments for day-to-day liquidity management under the liquidity adjustment facility.
    • Cash Reserve Ratio (CRR) : It refers to the percentage of net demand and time deposits which the scheduled commercial banks have to keep with RBI at zero interest Rate as per RBI act 1934.
    • Statutory Liquidity Ratio (SLR) : It refers to the percentage of net demand and time deposits which the scheduled commercial banks have to keep with themselves. i.e. by purchasing Govt. Securities or in the form of cash or gold as per Banking Regulation Act 1949, Sec 24.
      • SLR is a mechanism used by Commercial Banks for providing credit to the Govt. 
    • Open market operations : RBI buys or sells Govt. Bonds in the second Ratio.
  • RBI Amendment Bill 2005 provides flexibility to RBI in fixing the CRR and SLR.
  • Though RBI is responsible for the safety and stability of the Banking sector, it is not legally independent.
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42 comments:

  1. these notes are just worth it. thanks alot . one can revise from them easily

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  2. please give it in pdf format

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  3. Imperial Bank of India is the Predecessor of State Bank of India not RBI. SBI traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turn became the State Bank of India. The Government of India nationalised the Imperial Bank of India in 1955 with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India.

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    Replies
    1. Thanks for the comment Indu Babu. I think we've already uploaded this in the Short Notes on State Bank of India....

      Good Day :)

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    2. its not correct frnds,,,indu giving wrong info

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    3. ms.indu is giving the right information.imperial bank was the predecessor of SBI only and not RBI...pls note dear friends...

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    4. We really admired your works.
      But please tell me how can i download these files these all are protected...or otherwise make it in pdf format.
      Thanks

      Delete
    5. Indu babu n Sreemadhavi Roopesh... The above information provided is true but needed to be in complete form... Imperial Bank of India was natioanlised in 1955 n rechristened as State Bank of India... But before coming of RBI into existence the controlling n supervisory power of Indian Banking System was with Imperial Bank Of India... So structurally its a predecessor of SBI but functionally its the predecessor of RBI...

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    6. Mr. anonymous you need this data.. just right click in the page and go for print option. then select the required data and copy it and Paste it in MS word

      Delete
    7. Mr. anonymous you need this data.. just right click in the page and go for print option. then select the required data and copy it and Paste it in MS word

      Delete
    8. ofcourse it will work if you have a printer attached with your computer.. otherwise i am not sure

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    9. save as option in the right click menu will also work

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  4. thanks for giving notes abt rbi
    pls give more details abt ibps clerk interview my name is arun from sivkasi

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  5. in rbi assistants material imperial bank of india is known as rbi its totally wrong please note this frends... imperial bank of india is sbi

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  6. Thanks for giving valuable & useful information to me,

    i hope that u are give more updates,

    ONCE AGAIN " MANY THANKS " Sir/Mam.

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  7. Thanks a lot for this information but i would like to say that present RBI Governor is not Duvvuri Subba Rao .
    Present Governor of Reserve Bank of India is Raghuram Rajan (4 September 2013)

    Please update it above mention place.

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  8. Thanks a lot for the information giving to us. It is really very useful for the nearest IBPS exam.
    But i would like to say one thing is to correct above mentioned that the present Governor of Reserve Bank of India is Raghuram Rajan (4 September 2013)
    not Duvvuri Subba Rao.
    I think you get my point.

    Thanks again.

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  9. please provide all these notes in pdf format that should be more beneficial..........
    thanks

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  10. Thanks for ur valuable information........

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  11. 29 offices of rbi...............

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  12. thnku so much..it helps me alot!!!!

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  13. Mr. annonymous you need this data then right click on the page and select print option. from the print preview select required portion and copy it then paste it in MS Word Okey..

    ReplyDelete
  14. ofcourse it will work if you have a printer attached with your computer. but i am not sure about the other

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  15. Thank you so much it very helpful to me n all thanks alot God bless!!

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  16. where is the total description of function of rbi???

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  17. where is the total description of rbi's function????

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  18. where is the total description of function of rbi???

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  19. Gud mrg sir , Please send soft copy to my email Id
    psr.sravani@gmail.com

    ReplyDelete
  20. Please give all materials in pdf... so that we can take print outs and study and you are doing a great job...please give all materials in pdf that is only one kind request.. so that we can refer to ur materials easily...

    ReplyDelete
  21. please provide the information in pdf format... so it will become easy to make hard copy ....plz....

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  22. plz give me pdf file in hindi so plz








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  23. send link in pdf format please..

    ReplyDelete
  24. pls update the banking awareness section

    ReplyDelete

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