How much you know about our Mother Bank- RBI?
RBI ‘Reserve Bank of India’ is our Mother of Banks and is called Central Bank of India found its stability on April 1, 1935 under Reserve Bank of India Act. It is also pumping the country’s currency and credit system and uses monetary policies to keep the financial stability in India. RBI is situated in Mumbai and it plays an important role in the financial market. It has 20 regional offices, 11 sub-offices. So, the RBI has its offices at 31 locations.
You should be commendable for establishing an overnight interbank lending rate of RBI which plays a vital function today. The Mumbai Interbank Offer rate ‘MIBOR’ gauges for Interest rate-related financial mechanism in India.
How was RBI established as a National entity?
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RBI was nationalized in the year 1949 and is superintended by the central board of directors delegated by the national government. The directors of RBI are selected by our national government for a period of four-year service and is fully held by our government of India. It upholds as outlined by Reserve Bank of India Act.
Objective of RBI:
RBI supervise and balance the financial sector of India which includes commercial banks, financial institutions, and non-banking finance. In the period of time, the action taken on by the RBI embodies rebuilding bank inspection, proposing Off-site inspection of banks and financial institutions and exaggerating the role of editors.
Presently, RBI is keen on the growth of supervising financial institutions meanwhile dealing with Bank fraudulence. It is also preparing a report for supervisory rating model for its bank and the intention is to cut-off interest rates.
How RBI actually functions in the financial sector?
Initially, the Monitory policy of India is formulated, implemented and supervised by RBI. It manages to sustain price stability and assures that the credit is increasing the production of the economic sector as well. It takes care of all foreign exchange under Foreign Exchange Management Act in 1999. According to the act, it grants the RBI to promote external trade and payment to build up the development of Foreign exchange market in India. Since it handles overall financial system, it boosts the public confidence in the national system, secures the interest rates and gives positive banking options to Public. Lastly, RBI accomplished as an issuer of the national currency. For India, the currency is either issued or demolished, depending on its present circulation stability.
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Current status things to know about:
Urjit Patel is the current governor of RBI from September 6, 2016. Within 3 months of his tenurity, Narendra Modi ‘Prime minister of India’ declared demonetization of Rs.500 and Rs.1000 currency note. He was an essential part of the team who decided on demonetization.
“To regulate the issue of Bank notes and 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; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth.” – Reserve Bank of India.