Reserve Bank of India

The RBI headquarters in Mumbai

The RBI Regional Office in Mumbai

The RBI heaquarters in Delhi.

The Reserve Bank of India (RBI) is the central bank of India, and was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Since its inception, it has been headquartered in Mumbai. Though originally privately owned, RBI has been fully owned by the Government of India since nationalization in 1949.

RBI is governed by a central board (headed by a Governor) appointed by the Central Government. The current governor of RBI is Dr.Y.Venugopal Reddy (who succeeded Dr. Bimal Jalan on September 6, 2003). RBI has 22 regional offices across India.

The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.

On June 27,2006,the Union Government of India reconstituted the Central Board of Directors of the Reserve Bank of India (RBI) with 13 members, including Azim Premji and Kumar Mangalam Birla.

The other members of the board are:

• Suresh Tendulkar, Economist and Member, Prime Minister's Economic Advisory Council (to represent Eastern Area Local Board)

• U. R. Rao, former Chairman, ISRO and Chairman Research Council, Physical Research Laboratory, Department of Space (to represent Northern Area Local Board)

• Lakshmi Chand, IAS (Retd.) (to represent Southern Area Local Board)

• Shashi Rekha Rajagopalan, Consultant, Co-operatives

• Suresh Kumar Neotia, Chairman, Ambuja Cement

• A. Vaidyanathan, Madras Institute of Development Studies

• Man Mohan Sharma, FRS, Former Director, Mumbai University Institute of Chemical Technology

• D. Jayavarthanavelu, Chairman and Managing Director, Laxmi Machine Works Ltd.

Those who were renominated to the board include

• Y. H. Malegam, Chartered Accountant, (to represent Western Area Local Board),

• H. P. Ranina, Supreme Court Advocate,

• Ashok S. Ganguly, Member, Investment Commission and Chairman, ICICI OneSource.

The retiring Directors include

Mr Ratan Tata

Mr Narayan Murthy

Mihir Rakshit

K. Madhava Rao

V. S. Vyas

K.P. Singh

Amrita Patel

Suresh Krishna

On 1 July,2006 in an attempt to enhance the quality of customer service and strengthen the grievance redressal mechanism, the Reserve Bank of India constituted a new department — Customer Service Department (CSD).

Main objectives

• 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 the public.

• Manager of Exchange Control:
  • 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.

• Issuer of currency:
  • Issues and exchanges or destroys currency and coins not fit for circulation.
  • Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.

• Developmental role
  • Performs a wide range of promotional functions to support national objectives.

• Related Functions
  • Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
  • Banker to banks: maintains banking accounts of all scheduled banks.
  • Owner and operator of the depository (SGL) and exchange (NDS) for government bonds.

There is now an international consensus about the need to focus the tasks of a central bank upon central banking. RBI is far out of touch with such a principle, owing to the sprawling mandate described above.

Major Liabilities of Commercial Banks

Figures below are in millions of Indian Rupees. See [1] and [2]

Year	Deposits and other AccountsTemplate:Fn	Bills Payable
1950	9,983	173
1955	11,592	262
1960	20,218	317
1965	32,897	446
1970	64,793	923
1975	156,665	2,254
1980	439,869	10,995
1985	1,032,134	24,556
1990	1,820,468	38,656
1995	3,984,352	116,622
2000
2005

Major Assets of Commercial Banks

Figures below are in millions of Indian Rupees. See [3] and [4]

Year	InvestmentsTemplate:Fn	AdvancesTemplate:Fn
1950	4,330	5,353
1955	4,600	7,037
1960	7,241	12,458
1965	9,884	21,954
1970	18,148	46,850
1975	45,999	106,167
1980	126,642	272,673
1985	303,378	623,553
1990	687,151	1,095,412
1995	1,750,206	2,243,308
2000
2005

Foot Notes

• Template:Fnb - include fixed, savings, current, contingency accounts, et al
• Template:Fnb - include securities of Central and States governments, trustee securities, shares, debentures, gold, et al
• Template:Fnb - include loans and advances, cash credit and overdrafts, bills purchased and discounted

See also

• List of RBI governors
• Indian rupee

External links

• Reserve Bank of India Official site
• Reserve Bank of India Ombudsman site
• Reforms on the mandate of RBI