Central Bank of India (Eco Project)

Central Bank of India
(Reserve Bank of India)

The Reserve Bank of India (RBI) is India's central bank. 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 Kolkata 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 of India.
The overall direction of the RBI lies with the 21-member central board of directors,
composed of: the governor; four deputy governors; two finance
ministry representatives (usually the Economic Affairs Secretary and the Financial
Services Secretary); ten government-nominated directors; and four directors who
represent local boards for Mumbai, Kolkata, Chennai, and Delhi. Each of these local
boards consists of five members who represent regional interests and the interests
of co-operative and indigenous banks.
It is responsible for the issue and supply of the Indian rupee and the regulation of

the Indian banking system. It also manages the country's main payment systems and
works to promote its economic development. The Reserve Bank's affairs are
governed by a central board of directors. The board is appointed by the Government
of India in keeping with the Reserve Bank of India Act. Appointed/nominated for a
period of four years.
The Reserve Bank of India performs the supervisory 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
under the Reserve Bank of India (Board for Financial Supervision) Regulations,
1994.The primary objective of BFS is to undertake consolidated supervision of the
financial sector comprising Scheduled Commercial and Co-operative Banks, All India
Financial Institutions, Local Area Banks, Small Finance Banks, Payments Banks, Credit
Information Companies, Non-Banking Finance Companies and Primary Dealers.
Objectives of Central Bank:

The primary objectives of the RBI according to the Preamble are as follows:
 To regulate the issue of Banknotes.

 To secure monetary stability in the country.
 To meet the economic challenges by modernizing the monetary policy
framework.
Besides it has other objectives, which can be listed out as below:
 To remain free from political influence and be in successful operation for

maintaining financial stability and credit.
 To discharge purely central banking functions in the Indian money market, such
as acting as the note-issuing authority, bankers’ bank and banker to
Government, and to promote the growth of the economy.
 To assist the planned process of development of the Indian economy.
Roles and Functions of Central Bank:-

Supervisory and Regulatory Authority:
 To set specific parameters for the banks in the country. This would include
financial operations within which the banking and financial systems are to
function.
 To protect the interests of every investor and offer economic and cost-efficient
banking services to the public.
Monetary Authority:
 To formulate and implement the monetary policies of the country.
 To maintain stability in the prices across all the sectors along with the objective
of growth.
Currency Authority:
 To issue, exchange or destroy currency that is not fit for circulation.
 To provide adequate currency notes and coins of the standard quality to the
public.
Foreign Exchange Management:

 To oversee the Foreign Exchange Management Act, 1999.
 To facilitate the external trade and development of the foreign exchange market
in the country.
Other Functions:
 To promote and perform promotional functions to support national banking and
other financial objectives.
 To offer banking solutions to the Central and State Governments.
 To act as a banker for the Central and State Governments.
 To be the Chief Banker to every bank across the country and maintain all the
banking accounts of every scheduled bank.

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Central Bank of India (Eco Project)

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Central Bank of India

(Reserve Bank of India)

It is responsible for the issue and supply of the Indian rupee and the regulation of

Objectives of Central Bank:

 To regulate the issue of Banknotes.

 To remain free from political influence and be in successful operation for

Roles and Functions of Central Bank:-

Foreign Exchange Management:

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