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Reserve Bank of India
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Reserve bank of India started its operations in April 1935 with a share capital of 5 cr. Shares were divided into 100 rs each. The entire share capital was owned by private shareholders.
Who is the first governor of rbi?
Sir Osborne Smith was the first governor of rbi.
When was the Reserve bank of India Nationalised?
It was nationalized in the year 1949.
Where is reserve bank of India?
Mumbai.
Body of Reserve bank of India:-
It has a body of 20 members consisting of One Governor and four deputy governors. One govt official from the Finance Ministry is appointed. Also, 10 directors for the economic life of the country and 4 directors for representing local boards are there.
Reserve banks of India bring monetary policy to make financial stability in India. Some important terms in Monetary policy are repo rate, the reverse repo rate, cash reserve requirements policy, and statutory liquidity requirements.
Functions of Reserve Bank of India:-
1. Section 22 is the most powerful weapon rbi has. It gives the right to issue banknotes of all denominations. This process is done by rbi as an agent of Government.
2. As per rule in 1957, rbi should have 200 cr of gold and foreign exchange in which 115 cr should be in gold.
3. It is the controller of credits it has all powers to influence the volume of credit created by banks of India.
4. Custodian of Foreign Exchange Reserves.
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Other important facts related to RBI:
- RBI is not required to accept general public deposits
- The headquarters of RBI is in Mumbai
- The primary lending rate is not determined by the RBI
- The primary lending rate is decided by different banks.
- The RBI determines the following rates; Bank Rate, Repurchase Rate, Reserve Repurchase Rate, and Cash Reserve Ratio
- The RBI was built on the recommendations of the Hilton Young Commission
- The quantitative instruments of RBI are – Bank policy rate, Cash reserve ratio, and Statutory liquidity ratio
- The objective of RBI’s monetary policy is to control inflation; This is to discourage hoarding of goods and encourage the flow of credit to the neglected sector.
- When RBI is the last resort to lend, it means that the RBI gives loans on the basis of eligible securities.
- The Government of India determines the number of coins
- Currently, the procedure to be applied to the currency – is the minimum reserve procedure.