FUNCTION OF RESERVE BANK OF INDIA

The Reserve Bank of India (RBI) is India's central bank. It formulates India's monetary policy with regard to the Indian rupee. RBI was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934. The share capital was divided into shares of 100 each fully paid, which was entirely owned by private shareholders in the beginning. Following India's independence in 1947, the RBI was nationalised in the year 1949.

Function and structure:RBI assumes an important role in the development strategy of the Government of India, and as a leading member of the Alliance for Financial Inclusion (AFI), a global network of financial policymakers from developing and emerging countries working together to increase access to appropriate financial services for the poor. RBI is also a member of the Asian Clearing Union. The general superintendence and direction of the RBI is entrusted with the 21-member-strong Central Board of Directorsthe Governor (currently Duvvuri Subbarao, to be succeeded on 5 September 2013 by Dr. Raghuram Rajan, four Deputy Governors, two Finance Ministry representatives, ten government-nominated directors to represent important elements from India's economy, and four directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these local boards consists of five members who represent regional interests, as well as the interests of co-operative and indigenous banks.

Main function:Monetary Authority:

Formulates, implements and monitors the monetary policy. Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.

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. Regulator and supervisor of the payment systems o Authorises setting up of payment systems o Lays down standards for operation of the payment system o Issues direction, calls for returns/information from payment system operators.

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.

Developmental role

Performs a wide range of promotional functions to support national objectives.

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 19 regional offices, most of them in state capitals and 9 Sub-offices.

Training Establishments Has five training establishments

Two, namely, College of Agricultural Banking 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)

Objective and Functions The functions of the BPSS will be to lay down policies for regulation and supervision of the payment systems in the country, laying down standards for existing and future payment systems, authorisation of payment systems, determination of the criteria for membership of payment systems including continuation, termination and rejection of membership, overseeing the administration of regulations and guidelines framed under the PSS Act 2007, issuing directions to payment system operators, calling for returns/information, etc.