After independence to India, RBI was nationalized on 1st January, 1949.
★ Banking Regulation Act 1949 empowered RBI and gave full-fledged functions of a central bank and as a banking and financial regulatory authority of India. By this RBI has authority to license and control banks, audit them, inspect, regulate and monitor.
RBI functions with certain objectives such as....
★ To maintain monetary stability.
★ To maintain financial stability and ensure sound financial institutions.
★ To maintain stable payment systems.
★ To ensure credit allocation by the financial system.
★ To regulate the overall volume of money and credit in the economy.
★ To promote the development of financial markets.
★ To educate and convert the general public to use organized financial and banking sector.
Some Important Functions of RBI:
★ Monitoring monetary policy by taking operate decision with the help of some direct and indirect tools like Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Refinance facilities. These are direct tools.
★ A few indirect tools: RBI also uses some indirect tools like Liquidity Adjustment Facility (LAF), Repo / Reverse Repo Rate, Open Market Operations (OMO), Marginal Standing Facility (MSF), Bank Rate, and Market Stabilisation Scheme (MSS).
★ RBI prints currency notes with the help of its subsidiaries, 'The Security Printing and Minting Corporation of India Limited (SPMCIL)', 'The Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL)'.
★ On behalf of Government of India RBI mints rupee coin with the help subsidiaries, 'The Security Printing and Minting Corporation of India Limited (SPMCIL)' which are known as mints which comes under Coinage Act, 1906.
★ RBI acts as Banker and Debt Manager to Government. It maintain accounts and banking transactions of central government, it receive funds and make payments and transfer funds on behalf of government and also known as Banker to Banks.
★ RBI is the Regulator of the Indian Banking Services and System, it regulates through
licensing banks, formulation of certain rules etc.,. It also known as Manager of foreign exchange and foreign reserves in India by appointing authorized dealers for exchanging foreign currency. Development of foreign currency reserves like Foreign Currency Assets (FCA), Special Drawing Rights (SDRs) and gold etc.,. The act that helps RBI to manage foreign exchange transactions is Foreign Exchange Management Act (FEMA) 1999.
★ RBI is Regulator and Supervisor of the Payment and Settlement Systems in India. All the clearing and settlements activities are done through different means and established different schemes and services like National Payments Corporation of India (NPCI), The Real Time Gross
Settlement (RTGS), Electronic Funds Transfer (EFT), National Electronic Clearing Service (NECS), Electronic Clearing Service (ECS), Cheque Truncation System (CTS) etc.
★ Banking Regulation Act 1949 empowered RBI and gave full-fledged functions of a central bank and as a banking and financial regulatory authority of India. By this RBI has authority to license and control banks, audit them, inspect, regulate and monitor.
RBI functions with certain objectives such as....
★ To maintain monetary stability.
★ To maintain financial stability and ensure sound financial institutions.
★ To maintain stable payment systems.
★ To ensure credit allocation by the financial system.
★ To regulate the overall volume of money and credit in the economy.
★ To promote the development of financial markets.
★ To educate and convert the general public to use organized financial and banking sector.
Some Important Functions of RBI:
★ Monitoring monetary policy by taking operate decision with the help of some direct and indirect tools like Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Refinance facilities. These are direct tools.
★ A few indirect tools: RBI also uses some indirect tools like Liquidity Adjustment Facility (LAF), Repo / Reverse Repo Rate, Open Market Operations (OMO), Marginal Standing Facility (MSF), Bank Rate, and Market Stabilisation Scheme (MSS).
★ RBI prints currency notes with the help of its subsidiaries, 'The Security Printing and Minting Corporation of India Limited (SPMCIL)', 'The Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL)'.
★ On behalf of Government of India RBI mints rupee coin with the help subsidiaries, 'The Security Printing and Minting Corporation of India Limited (SPMCIL)' which are known as mints which comes under Coinage Act, 1906.
★ RBI acts as Banker and Debt Manager to Government. It maintain accounts and banking transactions of central government, it receive funds and make payments and transfer funds on behalf of government and also known as Banker to Banks.
★ RBI is the Regulator of the Indian Banking Services and System, it regulates through
licensing banks, formulation of certain rules etc.,. It also known as Manager of foreign exchange and foreign reserves in India by appointing authorized dealers for exchanging foreign currency. Development of foreign currency reserves like Foreign Currency Assets (FCA), Special Drawing Rights (SDRs) and gold etc.,. The act that helps RBI to manage foreign exchange transactions is Foreign Exchange Management Act (FEMA) 1999.
★ RBI is Regulator and Supervisor of the Payment and Settlement Systems in India. All the clearing and settlements activities are done through different means and established different schemes and services like National Payments Corporation of India (NPCI), The Real Time Gross
Settlement (RTGS), Electronic Funds Transfer (EFT), National Electronic Clearing Service (NECS), Electronic Clearing Service (ECS), Cheque Truncation System (CTS) etc.
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