RESERVE BANK OF INDIA (RBI)
25, Jun 2019
Prelims level : Polity Governance - Constitutional Bodies, Regulatory Bodies Mains level : GS2E - Structure, organization and functioning of the Executive and the Judiciary Ministries and Departments of the Government; Pressure Groups and Formal / Informal Associations and their role in the Polity.
- Viral Acharya’s resignation as Deputy Governor of the Reserve Bank of India
- The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
- Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.
- 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
- Full-Time: Governor and not more than four Deputy Governors
- Nominated by Government: ten Directors from various fields and two government Official
- Others: four Directors – one each from four local boards
- Formulates, implements and monitors the monetary policy.
- Objective: maintaining price stability while keeping in mind the objective of growth.
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 Foreign Exchange
- 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.
- Performs a wide range of promotional functions to support national objectives.
Regulator and Supervisor of Payment and Settlement Systems:
- Introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public at large.
- Objective: maintain public confidence in payment and settlement system.
- 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.