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The fundamental object of the Reserve Bank of India is to discharge purely central banking functions in the Indian money market, i.e., to act as the note- issuing authority, bankers’ bank and banker to government, and to promote the growth of the economy within the framework of the general economic policy of the Government, consistent with the need of maintenance of price stability.Ī significant object of the Reserve -Bank of India has also been to assist the planned process of development of the Indian economy.

ROLE AND FUNCTIONS OF RBI FREE

Hence, the Bank was established with this primary object in view.Īnother objective of the Reserve Bank has been to remain free from political influence and be in successful operation for maintaining financial stability and credit. The Hilton-Young Commission, therefore, recommended that the dichotomy of functions and division of responsibility for control of currency and credit and the divergent policies in this respect must be ended by setting-up of a central bank – called the Reserve Bank of India – which would regulate the financial policy and develop banking facilities throughout the country. Prior to the establishment of the Reserve Bank, the Indian financial system was totally inadequate on account of the inherent weakness of the dual control of currency by the Central Government and of credit by the Imperial Bank of India. The Preamble to the Reserve Bank of India Act, 1934 spells out the objectives of the Reserve Bank as: “to regulate the issue of Bank notes and the 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.” Objectives of the Reserve Bank of India (RBI) In 1st April 1935, Reserve Bank of India was set up. So, it’s required to set up a brand new central bank. The commission submitted their reports saying that one single organization can’t be able to act as two separate agencies (both credit and currency control). Then the Government asked the Hilton Young Commission in 1925 to view on this subject. But unfortunately Imperial Bank failed to show its performance up to the mark and didn’t achieve any success as the Central Bank. In 1921, the Imperial Bank of India was established to perform as central bank of India by the British Government.

In fact, the RBI performs the four basic functions of management, viz., planning, organizing, directing and controlling in laying a strong foundation for the functioning of commercial banks. Its role in bank management is quite unique. The RBI influences the management of commercial banks through its various policies, directions and regulations. RBI is the queen bee of the Indian financial system which influences the commercial banks’ management in more than one way.

Other specialist banks exist, each with a unique function to play in the financial development of the country.The Reserve Bank of India (RBI) is the apex financial institution of the country’s financial system entrusted with the task of control, supervision, promotion, development and planning.

NABARD (National Bank for Agricultural and Rural Development) – People can resort to NABARD for any type of financial support for rural, handicraft, village, and agricultural development.

This type of bank can provide loans or other financial help to foreign countries that are exporting or importing goods.

Export and Import Bank (EXIM Bank) - EXIM Bank stands for Export and Import Bank.

With the support of this bank, small businesses can get current technology and equipment.

SIDBI (Small Industries Development Bank of India) - SIDBI can provide a loan for a small-scale enterprise or business.

Specialized banks are the name for several types of financial institutions. Certain banks exist just to serve a certain purpose.There are now just four Local Area Banks in existence, all of which are located in South India.Local Area Banks are governed by the 1956 Companies Act.Local Area Banks' primary goal is to make a profit.In India, it was first introduced in 1996.

ROLE AND FUNCTIONS OF RBI DOWNLOAD

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Role and functions of rbi