Banking Material for IBPS RBI Exams


1.Establishment on April 1, 1935 in accordance with the provision of the Reserve Bank India Act, 1934.
2.Central office at Mumbai since inception.
3.Though originally privately owned, since nationalization in 1949 fully owned by the Government of India.
The preamble prescribes  the objective as : “…to regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operated the currency and credit system of the country to its advantage.”

Central board :
1. Appointed / nominated by the central Government for a period of 4 years.
2. Constitution: Official Directors:
Full-Time: Governor and not more than four deputy governors.
Non-official Directors:
Nominated by Government: Ten directors from various field and one government official.
Others: Four Directors – one  each from four local boards.

Functions :General superintendence and direction`s of the Bank`s affairs.

Local boards:

a) One each for the four regions of the country in Mumbai, Calcutta (Kolkata), Chennai and New Delhi.
b) Membership: Consists of 5 members each, Appointed by central government. For a term of 4 years.
c)Functions; To advice the Central board on local matters and to represent territorial and economics interests of local cooperative and indigenous banks: to perform such other functions as delegated by Central board from time to time.

Umbrella Acts
1. Reserve Bank of India Act, 1934 : Governs the Reserve Bank functions.
2. Banking regulation act, 1949 governs the financial sector.

Acts governing specific functions
a. Public debt act, 1944/Government Security Act (proposed) : Governs government debt market .
b. Securities Contract (Regulation) Act, 1956 : Regulates government security market.
c. Indian coinage Act , 1906 : Governs currency and coins,
d. Foreign Exchange Regulation Act, 1973/Foreign Exchange Management Act, 1999:Governs foreign exchange market.

Acts governing Banking operations

a. Companies Act ,1956 :Governs bank as companies.
b. Banking companies (acquisition and transfer of undertakings) Act 1970/1980 Relates to nationalization of banks.
c. Banker`s books evidence act
d. Banking secrecy act
e. Negotiable instruments ACT ,1881

Acts Governing Individual Institutions
1. State Bank of  India Act , 1954
2. Industrial development Bank of India
3. National Bank for Agriculture rural development ACT
4. National Housing Bank act
5. Deposit insurance  and  credit guarantee Cooperation Act

Monetary Authority:

1. Formulates, implements and monitor the monetary policy .
2. Objective: Maintaining price stability and ensuring adequate flow of credit to productive sector.

Manager of Exchange control:

1. Manages the foreign exchange management act, 1999.
2. Objective : To facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.

Issue of currency:
a. Issues and exchange or destroys currency and coins not fit for circulation.
b. Objective : to give the public adequate quantity of supplies of currency notes and coins in good quantity .

RBI Related functions:
1.Banker to the government : Performs merchant banking functions for the central and state governments also acts as their banker.
2.Banker to banks:  Maintains banking accounts of  scheduled banks.

Has 29 regional offices, most of the in state capitals.
Training stabilities.

Full owned: National Housing Bank(NHB), National Bank of Agriculture and Rural development (NABARD), Deposit Insurance and Credit Guarantee (DICGC), Bharatiya  Reserve Bank Note Mudra Private Limited (BRBNMPL)
Majority stake :State bank of India.
Minority stake: Infra-structure Development Finance Company (IDFC),Securities Training Corporation of India (STCI), Discount and Finance House OF India (DFH).

Customer service:
Help desks: in all departments and all offices to give general guidance to public.

Regulations review Authority : constantly reviews rules and regulations to make them more customer friendly.


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