IBPS Exam do contain frequent questions in the General Awareness section about RBI Policies, Guidelines and thus we have provided you with suitable information to crack those questions and get good result. RBI stands for Reserve Bank of India which is main organisation of all banks in India. It was established in the time of British. The British rule established the RBI Act in 1934 and founded of the bank was 1st April 1935.After independence of India, the nationalisation of the RBI was executed on 1st January 1949.Its presently head office in Mumbai and before 1937 it is in Kolkata. It plays an important role in development of country with Government of India.
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- 1 Idea of RBI
- 2 Structure of RBI
- 3 Main Functions of RBI
- 4 Monetary Policies
- 5 RBI rules for co-operative bank
- 6 RBI policies to control inflation
- 7 RBI policies on commercial banks
- 8 RBI policies to control rupee depreciation
- 9 RBI on economic policies
- 10 RBI policies on money supply
- 11 RBI policies for financial inclusion
- 12 Share this:
- 13 Related
Idea of RBI
When bank crisis,the first prime minister Mr.Jawahar Lal Nehru announced that there should be one central bank above all the banks and concept taken from England.
Structure of RBI
Presently governor of RBI is Mr. Raghuram Rajan. It is the member of Asian Clearing Union.RBI has 21 members(The Governor,4-deputy-governor,2 Finance Ministry Representative,10 government nominated representatives and 4 directors from local board headquarters at Mumbai,Chennai,Kolkata,New Delhi).RBI also acted as the central bank of two either countries which are Burma in 1937-1942 and Pakistan in 1947-1948.RBI is fully owned government organisation. The committee which rules and regulations of the RBI by Hilton Young committee.There are four regional zone headquarters are Mumbai,Kolkata,Chennai and New Delhi.It has two preparing schools for its officers like Reserve Bank Staff College at Chennai and College of Agricultural Banking at Pune.
Main Functions of RBI
There are four main functions of this organisation as follows:-
- Financial Supervision
- Supervisor of financial system.
- Monetary Exchange Policy.
- Issue of Currency.
This is working under the guidance of BFS( Board of Financial Supervision ).The main and important work of Board of Financial Supervision is to taking the reports of the financial sector comparing from banks,financial institute and non banking financial companies in the country.The board is to meet once in an every month for the inspection of reports and other issues.
Supervisor of financial system
It controls the monetary supply, monitors economic indicators like the gross domestic product and has to decide the design of the rupee banknotes as well as coins.It is main function of this to check the public interest’s and confidence of the system & gives the effective service to the customers.
Monetary Exchange Policy
In this, the promotion of foreign trade ,payment and maintain the foreign exchange market in India. Department for inflow and outflow of cash and also controls the stability of price i.e. inflation and deflation in the country.
Issue of currency
Issue of currency by RBI in 1935. The objectives of this issuing the notes, coins and giving the supply of same to the public. 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.
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Bank rate is defined as the rate charges by the central bank for the initial money to commercial banks.Presently bank rate will be 7%.
Cash Reserve Ratio(CRR)
It is specified fractions of the total deposit of customers which commercial banks hold in the form of cash or deposit with the central bank.It is set by the guidelines by the central bank.Presently it is 4%.
Statutory liquidity ratio (SLR)
The ratio of liquid assets to net demand and time liabilities (NDTL) is called statutory liquidity ratio (SLR).Presently it is 21.25%.
RBI rules for co-operative bank
It is recently revised the policies for the co-operative bank on the recommendation of High Power Committee for examining the existing policy. Revised policies is for the start up capital and co-operate governance.It has been revised on the EPN(Entry Points Norms).Co-operate governance accept significant importance in running co-operatives banks.
Following are the criteria prescribed for the new co-operatives banks as :
- There should be at least two directors with banking experiences or person with relevant profession i.e. CA( Chartered Accountants with banking experience).
- Promoters should not be defaulters from any financial institute.
- No criminal process should have been started by the promoters.
- Promoters should not be director with any bank.
RBI policies to control inflation
Inflation means that failure of supply equal to the increase in demand.
- It controls the inflation by raising the policy rates like CRR,SLR and bank rate.
- Cuts marginal standing facility(MSF) rate.
- Loosen liquidity.
- The rupee defence.
RBI policies on commercial banks
RBI extended the banking facilities; strengthen the commercial banks in the country.and also extended the functional areas of the bank .
- Licensing Requirements
- Corporate Governance in Banks
- Statutory Pre-emptions
- Interest Rates
- Prudential Norms
- Disclosure Norms
- Anti-Money Laundering Norms
- Protection of Small Depositors
- Para – banking Activities
- Annual Onsite Inspection
RBI policies to control rupee depreciation
The Indian currency(rupees) has depreciated against the US Dollar. Control of rupee depreciation by following ways:-
- Improving the investors.
- Making bond on the basis of investors.
- Strength of rupee.
RBI on economic policies
Rates will be unchanged during the economic policies.It is based on five takeaway for RBI economics policies are as follows:-
- Inflation remains a concern.
- RBI maintains accommodation stance.
- Outlook on growth.
- More monetary transmission needed.
- Global growth remains a concern.
RBI policies on money supply
RBI uses the money supply to manage liquidity or in a manner that balances supply and demand.Money supply depends on the repo rates,reverse repo rate, CRR, SLR and bank rate.
RBI policies for financial inclusion
Financial inclusion is an important steps toward the growth of country. It helps in over all growth of the country.Financial inclusion policy comprises the following:
- No Frills Accounts
- Simplification of KYC norms
- Use of Intermediaries
- Introduction of General Credit Cards
- Use of Technology
- Use of Regional Language
- One-time Settlement
- Financial Education