Reserve bank of india

                                                           

                    Reserve bank of India

1. Establishment
2. preamble
3. central board
4. board of financial supervision
5. board of payment and settlement system
6. local board
7. legal framework
8. main function
9. department
10. offices
11. training establishments
12. subsidiaries

1. Establishment
The reserve bank of India was established on april 1, 1935 in accordance with the provisions of the reserve bank of India act, 1935.
The central office of reserve bank was initially established in Calcutta but was permanently moved in Mumbai in 1937. the central office where the governor sits and where the policies are formulated.
Though originally privately owned, since nationalization in 1949, the reserve bank is fully owned by the government of India.

2. Preamble
The preamble of the RBI describes the basic functions of the RBI as:
“To regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage”.

3. Central Board
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
• Constitution:
o Official Directors
 Full-time : Governor and not more than four Deputy Governors
o Non-Official Directors
 Nominated by Government: Ten Directors from various fields and one government Official
 Others: four Directors - One each from four local boards

Functions: General superintendence and direction of the Bank's affairs

SECRETARY'S DEPARTMENT
Names and addresses of the Directors of the Central Board of the Reserve Bank of India
1. Dr. D Subbarao
Governor
Reserve Bank of India
Central Office
Mumbai 400 001. @11. Shri Azim Premji
Chairman,
WIPRO Limited
Doddakannelli,
Sarjapur Road,
Bangalore – 560033
2. Smt. Shyamala Gopinath
Deputy Governor
Reserve Bank of India
Central Office
Mumbai 400 001. @12. Shri Kumar Mangalam Birla
Chairman,
Aditya Birla Group of Companies
Aditya Birla Centre,
S. K. Ahire Marg, Worli
Mumbai – 400 030
3. Smt. Usha Thorat
Deputy Governor
Reserve Bank of India
Central Office
Mumbai 400 001. @13. Smt. Shashi Rajagopalan
Plot No. 10, Saket Phase 2
Kapra, ECIL Post
Hyderabad – 500 062
4. Dr.K.C.Chakrabarty
Deputy Governor
Reserve Bank of India
Central Office
Mumbai 400 001. @14. Shri Suresh Neotia
B-32, Greater Kailash Part - I
New Delhi – 110 048
5. Dr. Subir Gokarn
Deputy Governor
Reserve Bank of India
Central Office
Mumbai 400 001. @15. Dr. A. Vaidyanathan
B-1, Sonali Apartment, Old No. 11
Beach Road, Kalakshetra Colony
Chennai – 600 090
*6. Shri Y.H. Malegam
Chartered Accountant
C/o S. B. Billimoria & Company
Meher Chambers (2nd floor)
R. Kamani Road, Ballard Estate
Mumbai 400 001 @16. Prof. Man Mohan Sharma
2/3 Jaswant Baug (Runwal Park),
Behind Akbarallys, Chembur Naka
Mumbai – 400 071
*7. Prof. Suresh D. Tendulkar
Economist,
AD-86-C,
Shalimar Bagh,
New Delhi – 110 088 @17. Dr. D. Jayavarthanavelu
Chairman & Managing Director
Lakshmi Machine Works Limited
34 A, Kamraj Road
Coimbatore -641018
*8. Prof. U. R. Rao
Chairman, Physical Research Laboratory
Department of Space,
Government of India
Antariksh Bhavan, New BEL Road
Bangalore – 560 094 @18. Shri Sanjay Labroo
Managing Director & CEO
Asahi India Glass Ltd.
Global Business Park
Tower - B, 5th Floor'
Mehrauli - Gurgaon Road
Gurgaon - 122002 (Haryana)
*9. Shri Lakshmi Chand
IAS (Retd.),
C-12, Sector 14
NOIDA, Gautham Budh Nagar
Uttar Pradesh #19. Shri Ashok Chawla
Finance Secretary
Government of India
Ministry of Finance
New Delhi 110001
@10. Shri H. P. Ranina
Advocate, Supreme Court of India,
506, Raheja Centre,
214 Backbay Reclamation,
Free Press Journal Road,
Mumbai - 400 023
* Directors nominated under Sect 8 (1) (b) of the RBI Act, 1934.
@ Directors nominated under Sect 8 (1) (c) of the RBI Act, 1934.
# Director nominated under Sect 8 (1) (d) of the RBI Act, 1934.
Dated November 24, 2009


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Local Boards
• One each for the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi
• Membership:
• consist of five members each
• appointed by the Central Government
• for a term of four years
Functions: To advise the Central Board on local matters and to represent territorial and economic interests of local cooperative and indigenous banks;
To perform such other functions as delegated by Central Board from time to time.


Names and Addresses of the Members of The Local Boards of The Reserve Bank of India
WESTERN AREA NORTHERN AREA
*1. Shri Y.H. Malegam,
Chartered Accountant,
c/o S. B. Billimoria & Company,
Meher Chambers (2nd floor),
R. Kamani Road, Ballard Estate,
Mumbai - 400 001. 1. Prof. U. R. Rao
Chairman,
Physical Research Laboratory,
Department of Space,
Antariksh Bhawan, New BEL Road
Bangalore � 560094
2. Shri K.Venkatesan,
113, F-Block,
Anna Nagar East ,
Chennai - 600040. 2. Shri Mitha Lal Mehta
Former Chief Secretary
Government of Rajasthan
5, Keshav Nagar, Gopalpura Road
Jaipur - 302 018
3. Shri Dattaraj V. Salgaocar,
Managing Director,
V.M.Salgaocar & Bro Ltd.,
Hira Vihar, Airport Road, Chicalim,
Vasco Da Gama,
Goa - 403 711. 3. Dr. Ram Nath
Ex-Professor & Vice Chancellor
CSA University of Agri. & Tech.
Plot No. 710, 'A' Block, Avas Vikas Colony,
Hanspur, Naubasta, Kanpur - 208 001
4. Shri J.B. Patel
At & Post, Adada
Via Taluka & District Navsari
Gujarat
PIN-396445 4. Dr. Pritam Singh
Director, Management Development Institute
Mehrauli Road, Sukhrali
Gurgaon - 122 001


EASTERN AREA SOUTHERN AREA
*1. Shri Suresh D. Tendulkar
Economist,
AD-86-C,
Shalimar Bagh,
New Delhi – 110 088 *1. Shri Lakshmi Chand,
Retd. IAS, C-12,
Sector - 14, Noida,
U. P. 201301.
2. Shri A.K. Saikia, Retd. IAS,
H-8, Sector-27,
Noida - 201 301. 2. Shri C. P. Nair,
Retd. Chief Secretary to Government of Kerala,
Narayaneeyam,
Jawahar Nagar,
Thiruvananthapuram - 695 041.
3. Shri Sovan Kanungo, Retd. IAS,
17/404, East End Apartments,
Mayur Vihar I (Extension),
New Delhi – 110 096. 3. Dr.M. Govinda Rao.
Director,
National Institute of Public Finance and Policy,
18/2, Satsang Vihar Marg,
Special Institutional Area (Near JNU)
New Delhi - 110 067.
4. Smt. Devaki Jain,
Tharangavana, D-5, 12th Cross,
RMV Extension,
Bangalore - 560080.
* Representative on the Central Board, appointed w.e.f. November 27, 2000.
Mumbai, dated May 10, 2002.
Financial Supervision
The Reserve Bank of India performs this 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.

Objective Primary objective of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies.
Constitution The Board is constituted by co-opting four Directors from the Central Board as members for a term of two years and is chaired by the Governor. The Deputy Governors of the Reserve Bank are ex-officio members. One Deputy Governor, usually, the Deputy Governor in charge of banking regulation and supervision, is nominated as the Vice-Chairman of the Board.

BFS meetings
 The Board is required to meet normally once every month. It considers inspection reports and other supervisory issues placed before it by the supervisory departments.
BFS through the Audit Sub-Committee also aims at upgrading the quality of the statutory audit and internal audit functions in banks and financial institutions. The audit sub-committee includes Deputy Governor as the chairman and two Directors of the Central Board as members.

The BFS oversees the functioning of Department of Banking Supervision (DBS), Department of Non-Banking Supervision (DNBS) and Financial Institutions Division (FID) and gives directions on the regulatory and supervisory issues.
Functions Some of the initiatives taken by BFS include:
i. Restructuring of the system of bank inspections
ii. Introduction of off-site surveillance,
iii. Strengthening of the role of statutory auditors and
iv. Strengthening of the internal defences of supervised institutions.
The Audit Sub-committee of BFS has reviewed the current system of concurrent audit, norms of empanelment and appointment of statutory auditors, the quality and coverage of statutory audit reports, and the important issue of greater transparency and disclosure in the published accounts of supervised institutions.
Current Focus
• supervision of financial institutions
• consolidated accounting
• legal issues in bank frauds
• divergence in assessments of non-performing assets and
• supervisory rating model for banks.
Legal Framework
                                                               
                                                           Umbrella Acts
• Reserve Bank of India Act, 1934: governs the Reserve Bank functions
• Banking Regulation Act, 1949: governs the financial sector
Acts governing specific functions
• Public Debt Act, 1944/Government Securities Act (Proposed): Governs government debt market
• Securities Contract (Regulation) Act, 1956: Regulates government securities market
• Indian Coinage Act, 1906:Governs currency and coins
• Foreign Exchange Regulation Act, 1973/Foreign Exchange Management Act, 1999: Governs trade and foreign exchange market
• "Payment and Settlement Systems Act, 2007: Provides for regulation and supervision of payment systems in India"
Acts governing Banking Operations
• Companies Act, 1956:Governs banks as companies
• Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980: Relates to nationalisation of banks
• Bankers' Books Evidence Act
• Banking Secrecy Act
• Negotiable Instruments Act, 1881

Acts governing Individual Institutions
• State Bank of India Act, 1954
• The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003
• The Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993
• National Bank for Agriculture and Rural Development Act
• National Housing Bank Act
• Deposit Insurance and Credit Guarantee Corporation Act

Main Functions
1. Monetary Authority:
• Formulates, implements and monitors the monetary policy.
• Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.
2. 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.
3. 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.
4. 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.
5. Developmental role
• Performs a wide range of promotional functions to support national objectives.
6. 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.

Offices
• Has 22 regional offices, most of them in state capitals.
Training Establishments
Has six training establishments
• Three, namely, College of Agricultural Banking, Bankers Training College and Reserve Bank of India Staff College are part of the Reserve Bank
• Others are autonomous, such as, National Institute for Bank Management, Indira Gandhi Institute for Development Research (IGIDR), Institute for Development and Research in Banking Technology (IDRBT)
For details on training establishments, please check their websites links for which are available in Other Links.

Subsidiaries
Fully owned: National Housing Bank(NHB), Deposit Insurance and Credit Guarantee Corporation of India(DICGC), Bharatiya Reserve Bank Note Mudran Private Limited(BRBNMPL)
Majority stake: National Bank for Agriculture and Rural Development (NABARD)
The Reserve Bank of India has recently divested its stake in State Bank of India to the Government of India.