MUMBAI (Reuters) - The Reserve Bank of India reviews policy on Tuesday and may leave the

statutory liquidity ratio (SLR), the amount of deposits banks must hold in government securities
in reserve, unchanged.
None of the 22 analysts polled by Reuters this month expected the Reserve Bank of India to
change its benchmark interest rates in the review.
One analyst expected the central bank to roll back its cut in the SLR by 100 basis points in
January.
Following is a timeline of changes in the Reserve Bank of India's SLR requirement since March
1949.

The Reserve Bank of India raised the minimum amount of money that banks have to keep in the
form of liquid cash, gold or government bonds, called the Statutary Liquidity Ratio (SLR) from
24% to 25%.It has also increased the provisioning for banks' advances to the real estate
companies.

"Over the last fortnight the expectations of rate hike were quashed and people were expecting no
rate changes. What did come as a surpise is thehike in SLR .The Central bank may be reducing
it's accommodative stance and as a first step it is reducing refinance facility for NBFCs and
mutual funds," said Jayesh Mehta-Country Treasurer, Bank of America.
The market took a negative perspective on the policy with key indices dropping and all sectoral
indices ending in the red.
Experts said that the increased provision could hike borrowing costs for banks by 25 basis points.
The Sensex was down 387.10 points or 2.31% to close at 16353.40. Realty buried under the RBI
policy going down 6.24% and metals were beaten down 5.82%. Banking and Consumer
Durables were down 3.82% and 3.26% respectively.
Rashesh Shah, Chairman Edelweiss Group said, "There has been no change in key policy rates
which is very good.However, the policy statement is mostly hawkish on asset price inflation and
overheating. Credit quality emphasis is back in focus. "
The Nifty, which closed at 4846.70, had 42 declines and 8 advances. Wipro rose 2.24% to close
at Rs. 604.65. The company beat street expectations to record consolidated revenues of Rs.6917
crore, a rise of 10.2% over the previous quarter. Net profits were up 14.4% at Rs.1161.7 crore.
Tata Motors and Sun Pharma rose 1.41% and 1.19% respectively.
Reliance Capital fell 8.06%. Other declines included Unitech and Rcom as well as Hindalco and
Tata Steel from the metal space.

SLR Rate increased to 25% – CRR rate, repo rate, reverse repo rate remain unchanged in RBI
policy. The Reserve Bank of India today raised the Statutory Liquidity Ratio (or SLR) the
deposits that commercial banks are to park in government securities, by one percentage points to
25 per cent, while keeping all other rates intact.
Here are highlights of the RBI Monetory Policy:
* SLR Rate increased to 25%
* CRR rate, repo rate, reverse repo rate remain unchanged
* Retained the economic growth projection to 6 per cent during FY’10
* Pegged inflation at much higher rate of 6.5 per cent by this fiscal (earlier 5 percent)
RBI officials explain that Inflation is basically grounded in food inflation. It is something which
the government is definitely very concerned about. There are number of administrative measures
which the government has taken and will continue. Inflation is expected to be around 6 per cent
by end of March 2010. According to finance ministry the economy is on a comeback track but
there is need for more definite and robust signal
Effeect of change in SLR: SLR is something which does not really affect the ground reality. As
of today the banks in any case are already operating at more than 25 per cent.

Board of directors
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.
The RBI Regional Office in Nagpur(Maharashtra)
On June 27, 2006, the Union Government of India reconstituted the Central Board of Directors
of the Reserve Bank of India (RBI) with 13 members, including Azim Premji and Kumar
Mangalam Birla.
[edit] Other members of the board
• Suresh Tendulkar, Economist and Member, Prime Minister's Economic Advisory Council
(to represent Eastern Area Local Board)
• U. R. Rao, former Chairman, ISRO and Chairman Research Council, Physical Research
Laboratory, Department of Space (to represent Northern Area Local Board)
• Lakshmi Chand, IAS (Retd.) (to represent Southern Area Local Board)
• Shashi Rekha Rajagopalan, Consultant, Co-operatives
• Suresh Kumar Neotia, Chairman, Ambuja Cement
• A. Vaidyanathan, Madras Institute of Development Studies
• Man Mohan Sharma, FRS, Former Director, Mumbai University Institute of Chemical
Technology
• D. Jayavarthanavelu, Chairman and Managing Director, Laxmi Machine Works Ltd.
Those renominated to the board
• Y. H. Malegam, Chartered Accountant, (to represent Western Area Local Board)
• H. P. Ranina, Supreme Court Advocate
• Ashok S. Ganguly, Member, Investment Commission and Chairman, ICICI OneSource
[edit] Retiring directors
• N. R. Narayana Murthy
• Mihir Rakshit
• Pushpendra Suryavanshi
• K. Madhava Rao
• V. S. Vyas
• K. P. Singh
 • Amrita Patel
• K. P. Priya
On 1 July 2006, in an attempt to enhance the quality of customer service and strengthen the
grievance redressal mechanism, the Reserve Bank of India constituted a new department —
Customer Service Department (CSD).
Main Functions of RBI Reserve Bank of India is the main monetary authority of the country. It
formulates, implements and monitors the monetary policy and thereby plays a key role in
maintaining price stability and ensuring adequate flow of credit to productive sectors. RBI is the
regulator and supervisor of the financial system in the country. It prescribes broad parameters of
banking operations within which the country's banking and financial system functions. It
manages the foreign exchange of the country. Performs merchant banking function for the
central and the state governments; also acts as their banker. Maintains banking accounts of all
scheduled banks. Issues and exchanges or destroys currency and coins not fit for circulation.
[edit] Main objectives

Reserve Bank of India headquarters, Delhi entrance with the Yakshini sculpture depicting
"Prosperity through agriculture"[1].

The RBI Regional Office in Delhi.

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. The Banking Ombudsman Scheme
has been formulated by the Reserve Bank of India (RBI) for effective redressal of
complaints by bank customers.
Manager of exchange control
• 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: the main objective is to give the public adequate supply of currency of good
quality and to provide loans to commercial banks to maintain or improve the GDP(Gross
Domestic Product).
The basic objectives of RBI are to issue bank notes, to maintain the currency and credit system
of the country to utilize it in its best advantage, and to maintain the reserves. RBI maintains the
economic structure of the country so that it can achieve the objective of price stability as well as
economic development, because both objectives are diverse in themselves.
Related functions
• Banker to the Government: performs merchant banking function for the central and the
state governments; also acts as their banker.
• Bank to banks: maintains banking accounts of all scheduled banks
There is now an international consensus about the need to focus the tasks of a central bank upon
central banking. RBI is far out of touch with such a principle, owing to the sprawling mandate
described above.
[edit] Major liabilities of commercial banks
Figures below are in millions of Indian Rupees. See [1] and [2]
Year Deposits and other Accounts[2] Bills Payable
1950 19,983 173
1955 11,592 262
1960 20,218 317
1965 32,897 446
1970 64,793 923
1975 156,665 2,254
1980 439,869 10,995
1985 1,032,134 24,556
1990 1,820,468 38,656
1995 3,984,352 116,622

[edit] Major assets of commercial banks

Figures below are in millions of Indian Rupees. See [3] and [4]
Year Investments[3] Advances[4]
1950 4,330 5,353
1955 4,600 7,037
1960 7,241 12,458
1965 9,884 21,954
1970 18,148 46,850
1975 45,999 106,167
1980 126,642 272,000
1985 303,378 623,553
1990 687,151 1,095,412
1995 1,750,206 2,243,308

[edit] Tarapore committee

The Tarapore committee is a committee setup by the Reserve Bank of India under the
chairmanship of former RBI deputy governor S S Tarapore to "lay the road map" to capital
account convertibility.
The five-member committee recommended a three-year timeframe for complete convertibility by
1999-2000.
In March 2006, the then Finance Minister of India, P Chidambaram said that the Central
government was "within striking distance" of implementing the committee's report.
• During partition, the federal reserve was split by the British Raj to aid India and Pakistan
separately. Some claim that Pakistan has never gotten its share to date, which is incorrect.
On January 19, 1948, Pakistan received its share of 56 Crores Rupees bullion. Apart from
that, Nizam of Hyderabad illegally transferred the funds for the state of Hyderabad to
Pakistan, and Pakistan has not yet repaid these funds. Nawab of Junagarh fled with 3
Crore cash, which was government property. When it looked like the British would help
India get that money back, the Pakistani government helped Nawab flee to Europe with
the money using Pakistani government planes. One of the planes refuelling at Beirut
crashed in the Aegean Sea and money was declared lost. This story has led to several
modern treasure hunts in that area.[