Banking
he
Financial Institutions in India mainly comprises of the Central Bank
which is better known as the Reserve Bank of India, the commercial
banks, the credit rating agencies, the securities and exchange board of
India, insurance companies and the specialized financial institutions in
India. - See more at:
http://business.mapsofindia.com/finance-commission/institutions/#sthash.cnR2FBSP.dpuf
The
Financial Institutions in India mainly comprises of the Central Bank
which is better known as the Reserve Bank of India, the commercial
banks, the credit rating agencies, the securities and exchange board of
India, insurance companies and the specialized financial institutions in
India.ABOUT RBI
The Reserve Bank of India is India's Central Banking Institution, which controls the Monetary Policy of the Indian Rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934The bank is also active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion (AFI) The RBI plays an important part in the Development Strategy of the Government of India. It is a member bank of the Asian Clearing Union
The general superintendence and direction of the RBI is entrusted with the 21-member Central Board of Directors:
- the Governor (Dr. Raghuram Rajan),
- 4 Deputy Governors,
- 2 Finance Ministry representatives,
- 10 government-nominated directors to represent important elements from India's economy, and
- 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these local boards consists of 5 members who represent regional interests, and the interests of co-operative and indigenous banks.
Main Functions
Monetary Authority
Monetary authority or monetary policy refers to the use of instruments under RBI control to regulate availability, cost and user of money and credit and providing the citizens the appropriate available monetary facilities. Central bank does this to maintain pricing stability, low & stable inflation as well as promoting economic growth of country.Issuer of Currency
Reserve bank of India is the sole body who is authorized to issue currency in India. While coins are minted by GoI, the RBI works as an agent of GoI for distributing and handling of coins. RBI also works to prevent counterfeiting of currency by regularly upgrading security features of currency. For printing currency, RBI has four facilities at Dewas, Nasik, Mysore & Salboni. RBI is authorized to issue notes up to value of Rupees ten thousand.Banker and Debt Manager to Government
Just like individual need a bank to carry out their financial transactions effectively & efficiently, Government also need a bank to carry out its financial transactions. RBI serves this purpose for GoI. As banker to GoI, RBI maintains its accounts, receive payments into & make payments out of these accounts. RBI also helps GoI to raise money from public via issuing bonds & government approved securities.Banker to Banks
RBI also works as banker to all the scheduled commercial banks. All the banks in India maintain accounts with RBI which help them in clearing & settling inter bank transactions and customer transactions smoothly & swiftly. Maintaining accounts with RBI help banks to maintain statutory reserve requirements. RBI also acts as lender of last resort for all the banks.and the most important role is that it provide loan section up to 6%Regulator of the Banking System
RBI has the responsibility of regulating the nation's financial system. As a regulator and supervisor of Indian banking system it ensures the financial stability & public confidence in banking system. RBI use methods like On-site inspections, off-site surveillance, scrutiny & periodic meetings to supervise banks. RBI also has the responsibility of issuing new bank licenses, setting capital requirements and regulating interest rates in specific areas. RBI is currently focused on implementing Basel III norms.Manager of Foreign Exchange
With increasing integration of the Indian economy with the global economy arising from greater trade and capital flows, the foreign exchange market has evolved as a key segment of the Indian financial market and RBI has an important role to play in regulating & managing this segment. RBI manages forex and gold reserves of the nation.On a given day, the foreign exchange rate reflects the demand for and supply of foreign exchange arising from trade and capital transactions. The RBI’s Financial Markets Department (FMD) participates in the foreign exchange market by undertaking sales / purchases of foreign currency to ease volatility in periods of excess demand for/supply of foreign currency.
Regulator and Supervisor of the Payment and Settlement Systems
Payment and settlement systems play an important role in improving overall economic efficiency. The Payment and Settlement Systems Act of 2007 (PSS Act) gives the Reserve Bank oversight authority, including regulation and supervision, for the payment and settlement systems in the country. In this role, we focus on the development and functioning of safe, secure and efficient payment and settlement mechanisms. Two payment systems National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) allow individuals, companies and firms to transfer funds from one bank to another. These facilities can only be used for transferring money within the country.NEFT operates on a deferred net settlement (DNS) basis and settles transactions in batches. The settlement takes place for all transactions received till a particular cut-off time. It operates in hourly batches — there are 12 settlements from 8 am to 7 pm on weekdays and SIX between 8 am and 1 pm on Saturdays.Any transaction initiated after the designated time would have to wait till the next settlement time. In RTGS, transactions are processed continuously, all through the business hours. RBI’s settlement time is 9 am to 4:30 pm on weekdays and 9 am to 2:00 pm on Saturdays
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