8/8/2019 Rbi Final Copy of Rbi 1 http://slidepdf.com/reader/full/rbi-final-copy-of-rbi-1 1/46 Reserve Bank of India1 K.E.S. SHROFF COLLEGE OF ARTS & COMMERCE T.Y.BBI (Semester VI)Reserve Bank of India Introduction The Reserve Bank of India (RBI, Hindi: ê÷íâùì íð é Ó ) is the central bank of India and controls the monetary policy of the rupee as well as 287.37 billion US- Dollar (2009) currency reserves. The institution was established on 1 April 1935 during the British-Raj in accordance with the provisions of the Reserve Bank of India Act, 1934 [1] and plays an important part in the development strategy of the government. It was inaugurated as a private shareholders institution under the Reserve Bank of India Act 1934. It was nationalized in January 1949, under the Reserve Bank (Transfer to Public Ownership) of India Act, 1948. This act empowers the central government, in consultation with the Governor of the Bank, to issue such directions to RBI as might be considered necessary in the public interest. RBI is governed by a Central Board of Directors with 20 members consisting of the Governor and the Deputy Governors. The Governor and the deputy Governors of the Bank are Government of India
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appoi t preamble to t e R eserve Bank of India Act lays down t e
purpose of establishing RBI as ³to regulate issue of Bank notes, to keep the
reserves with a view to secur ing monetary stability in India and generally to
operate the currency and credit system of the country to its advantage´.
RBI took a leading role in designing and implementing policies for agr icultural
and industr ial development and for laying the foundations for f inancial markets.
Some of today¶s premier development and market institutions such as the
National Bank for Agr iculture and R ural Development (NABAR D), the
Industr ial Development Bank of India (IDBI) and the Unit Trust of India (UTI)
had their beginnings as speciali ed depar tments and divisions withi n the RBI.
When RBI star ted in 1935, there were just three depar tments, namely the
Bank ing Depar tment, the Issue Depar tment and the Agr icultural Credit
Depar tment. Today, RBI has 26 depar tments in the Central Off ice, have 26
regional and f ield off ices across the country, four subsidiar ies (BRB Note
Mudran Press Ltd., DIC C, NABAR D and NHB,) and a staff of over 20,000
employees.
Today, RBI is the monetary author ity, and regulator and supervisor for banks andnon-bank ing f inancial companies. RBI is the issue r of currency and the debt
manager for the central and state governments. Besides, RBI manages the
country¶s foreign exchange reserves, manage the capital account of the Balance
of payments, and design and operate payment systems. RBI also operates a
gr ievance redressed scheme for bank customers through the Bank ing
Ombudsmen and formulates policies for treating customers fair ly.
Objectives and Reasons for the Est abl i shment of R.B. .
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Initially, the RBI was established as shareholder¶s bank. Its share capital was R s.
5 crores, divided into 5 lakh fully paid up share of R s. 100 each. Our of this,
share of the nominal value of R s. 2,20,000 (2200 shares) were allotted to the
Central Government for disposal at par to the Directors of the Central Board of
the Bank seek ing to obtain the minimum share qualif ication. The remaining share
capital was owned by the pr ivate individuals. Thus, the control on the policy of
the RBI remained with the Government.
The RBI is governed by the Central Board of Directors. The Governor and two
deputy-Governors are appointed by the Government and other members of the
Governing Board are appointed by individual shareholders. In order to regulate
and control monetary and credit policy of the country, the Government is
empowered to supersede the central Board of Directors of the RBI if the Board
fails to discharge its obligations cast upon it by the RBI Act.
The demand for nationali ation of RBI was star ted with the setting up of RBI. It
was felt that RBI should be nationali ed in tune with the changing national and
international political and economical scenar io. The ob jective of its
nationali ation was stated, ³To implement the Government¶s policy that the Bank should function as state-owned institution and to meet the general desire that
control of the government over the bank¶s activities should be extended to ensure
greater co-ordination in the monetary economic and f inancial policies.´ In
February, 1947, it was decided to nationali e RBI. Thus, the RBI was
nationali ed with the passing of the R eserve Bank of India (transfer to public
ownershi p) Act in 1948. in terms of the Act, the entire share were transferred to
the central Government on payment of compensation to the shareholders @ R s.
118 and 62 paisa per share of R s. 100. Thus since January 1, 1949, the the
reserve bank of India is functioning as a state owned and state controlled
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F uncti ons of Reser ve Bank of Ind i a
F uncti ons of R.B. I
The R eserve Bank of India Act of 1934 entrust all the impor tant functions of a
central bank the R eserve Bank of India.
Bank of Issue
Under Section 22 of the R eserve Bank of India Act, the Bank has the sole r ight to
issue bank notes of all denominations. The distr i bution of one rupee notes and
coins and small coins all over the country is under taken by the R eserve Bank as
agent of the Government. The R eserve Bank has a separate Issue Depar tment
which is entrusted with the issue of currency notes. The assets and liabilities of
the Issue Depar tment are kept separate from those of the Bank ing Depar tment.
Or iginally, the assets of the Issue Depar tment were to consist of not less than
two-f if ths of gold coin, gold bullion or ster ling secur ities provided the amount of gold was not less than R s. 40 crores in value. The remaining three-f if ths of the
assets might be held in rupee coins, Government of India rupee secur ities,
eligi ble bills of exchange and promissory notes payable in India. Due to the
exigencies of the Second Wor ld War and the post -war per iod, these provisions
were considerably modif ied. Since 1957, the R eserve Bank of India is required to
maintain gold and foreign exchange reserves of R a. 200 crores, of which at least
R s. 115 crores should be in gold. The system as it exists today is known as the
minimum reserve system.
Banker t o Government
The second impor tant function of the R eserve Bank of India is to act as
Government banker, agent and adviser. The R eserve Bank is agent of Central
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required to buy and sell at f ixed rates any amount of ster ling in lots of not less
than R s. 10,000. The rate of exchange f ixed was R e. 1 = sh. 6d. Since 1935 the
Bank was able to maintain the exchange rate f ixed at lsh.6d. Though there were
per iods of extreme pressure in favor of or against the rupee. Af ter India became a
member of the International Monetary Fund in 1946, the R eserve Bank has the
responsi bility of maintaining f ixed exchange rates with all other member
countr ies of the I.M.F. Besides maintaining the rate of exchange of the rupee, the
R eserve Bank has to act as the custodian of India's reserve of international
currencies. The vast ster ling balances were acquired and managed by the Bank.
Fur ther, the RBI has the responsi bility of administer ing the exchange controls of
the country.
S uper vi sory functi ons
In addition to its traditional central bank ing functions, the R eserve bank has
cer tain non-monetary functions of the nature of supervision of banks and
promotion of sound bank ing in India. The R eserve Bank Act, 1934, and the
Bank ing R egulation Act, 1949 have given the RBI wide powers of supervi sion
and control over commercial and co-operative banks, relating to licensing andestablishments, branch expansion, liquidity of their assets, management and
methods of work ing, amalgamation, reconstruction, and liquidation. The RBI is
author ized to carry out per iodical inspections of the banks and to call for returns
and necessary information from them. The nationalization of 14 ma jor Indian
scheduled banks in July 1969 has imposed new responsi bilities on the RBI for
directing the growth of bank ing and credit policies towards more rapid
development of the economy and realization of cer tain desired social ob jectives.
The supervisory functions of the RBI have hel ped a great deal in improving the
standard of bank ing in India to develop on sound lines and to i mprove the
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P romoti onal functi ons
With economic growth assuming a new urgency since Independence, the range of
the R eserve Bank's functions has steadily widened. The Bank now performs a
var iety of developmental and promotional functions, which, at one time, wereregarded as outside the normal scope of central bank ing. The R eserve Bank was
asked to promote bank ing habit, extend bank ing facilities to rural and semi -urban
areas, and establish and promote new specialized f inancing ag encies.
Accordingly, the R eserve Bank has hel ped in the setting up of the IFCI and the
SFC; it set up the Deposit Insurance Corporation in 1962, the Unit Trust of India
in 1964, the Industr ial Development Bank of India also in 1964, the Agr icultural
R ef inance Corporation of India in 1963 and the Industr ial R econstruction
Corporation of India in 1972. These institutions were set up directly or indirectly
by the R eserve Bank to promote saving habit and to mobilize savings, and to
provide industr ial f inance as well as agr icultural f inance. As far back as 1935, the
R eserve Bank of India set up the Agr icultural Credit Depar tment to provide
agr icultural credit. But only since 1951 the Bank's role in this f ield has become
extremely impor tant. The Bank has developed the co-operative credit movement
to encourage saving, to eliminate moneylenders from the villages and to route its
shor t term credit to agr iculture. The RBI has set up the Agr icultural R ef inance
and Development Corporation to provide long-term f inance to farmers.
Classi f i cati on of RB Is functi ons
The monetary functions also known as the central bank ing functions of the RBI
are related to control and regulation of money and credit, i.e., issue of currency,
control of bank credit, control of foreign exchange operations, banker to the
Government and to the money market. Monetary functions of the RBI are
signif icant as they control and regulate the volume of money and credit in the
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This is secures by the
centralization of the entire
foreign exchange reserves
of the country with the
R eserve Bank of India. In
order to maintain stability
in exchange rates, the
R eserve Bank enter into foreign exchange transactions. It also administers
foreign currency for the central Government, state Govt. and Indian embassies in
foreign countr ies. There is a separate depar tment for this purpose in RBI known
as ³Exchange control currencies and tr ies to maintain balance between the
demand and supply of foreign exchange. The R eserve Bank is also author ized to
buy and sell foreign exchange from and to scheduled banks.
Regulati on of Bank i ng S yst em
The pr ime duty of the reserve Bank is to regulate the bank ing system of our
country in such a way that the people of the country can trust in the bank ing Up
to perform its duty.
T he Reser ve Bank has followi ng powers i n thi s regard:
Li censi ng :
Accord i ng t o the secti on 22 of the Bank i ng Regulati on Act , every bank has to
obtain license from the R eserve Bank. The R eserve Bank issues such license only
to those banks which fulf ill condition of the bank should be strong. The RBI isalso empowered to cancel the license granted to a bank works against the
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Management :
S ecti on 10 of the Bank i ng Regulati on Act embowered the R eserve Bank to
change manager or director of any bank if it considers it necessary or desirable.
Branch Expansi on:
S ecti on 23 requires every bank to take pr ior permission from R eserve Bank to
open new places of business in India or ro change the location of an existing
place of business in India or abroad.
P ower of i nspecti on of Bank:
U nder S ecti on 35, the R eserve Bank may inspect any bank and its books and its
books and accounts either at its own initiative or at the instance of the Central
Government. If, on the basis of the inspection repor t submitted by the R eserve
Bank Central Government is of the opinion that the affairs of the bank are being
conducted to the detr iment of the interests of depositors, it may direct to the
R eserve Bank to apply for the winding up of such bank.
P ower t o i ssue Di recti ons:
S ecti on 35(A ) of IBR Act confers powers to RBI to issue direction or to prevent
the affairs of the being conducted in manner detr iment to the interests of the
depositors or in a manner pre judicial to the interests of the bank or to secure
proper management of the bank.
S ecti on 36 confers powers on the RBI to caution or proh i bit banks against enter ing into any par ticular transaction and generally give advice to any bank. It
may pass orders requir ing the bank to carry out the specif ied instructions. In
order to develop a strong bank ing structure in the country the RBI promotes
amalgamation or merger of weak banks so that they can develop as a strong bank.
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S ecti on 38 of the Act empowered RBI to request to High Cour t to windup the
bank which has no hopes of improvement.
Clear i ng House
The RBI operates clear ing houses to settle bank ing transactions. The RBI
manages 14 ma jor clear ing houses of the country situated in different ma jor
cities. The State Bank of India and its associates look af ter clear ing houses
function in other par ts of the country as an agent of RBI.
Clear i ng House
Cred it Cont rol
Credit control is a very impor tant function of RBI as the Central Bank of India.
For smooth functioning of the economy RBI control credit through quantitative
and qualitative methods. Thus, the RBI exercise control over the credit granted by the commercial bank. The reserve Bank is the most appropr iate body to
control the creation of credit in view if its functions as the bank of note issue and
the custodian of cash reserves of the member banks.
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in March, 1999 and 7% in Apr il, 2000. It was fur ther reduced to 8% in March,
1999 and 7% in Apr il, 2000. It was fur ther changed several times and on 23
October, 2001 it reduced to 6.5%.
The bank rate policy of credit control has not been succeeding in India. As it isfailed to control inf lationary trend in the economy. It has failed to inf luence
interest rate in the money market.
T he bank rat e pol i cy proves i neff i ci ent due t o followi ng reasons:
y Ma jor par t of the credit in the market is made available by non-bank ing
institutions. The interest charged by these institutions has no direct relation
with the bank rate.y Most of the changes in bank rate have been made effective for combating
inf lationary trends.
y Speculative tendencies in the economy carry large premiums in the form of
huge margins of prof it. A small change in bank rate does not signif icantly
affect the prof it margin.
y Pr ior ity sector leading has almost become immense to the effect of changes
in the bank rate.
y Increasing non-dependence of commercial banks on the central bank for
rediscounting facilities is one of the ineffective bank rates in India.
Though the bank rate policy has not been effective in India. Yet the R eserve
Bank has been using it more and more as a weapon to control def lationary
pressure in the economy. Dur ing the last few years, the bank rate has been
reduced several times to combat the def lationary pressures in the economy. But this year it is currently sti pulated at 6%.
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2 ) Open Market Operati ons:
The term µOpen market operation¶ implies the purchase and sale by the Central
Bank not only the Govt. secur ities but also of other eligi ble papers. Like bills and
secur ities of pr ivate concerns section 17(8) of RBI Act. Empowers R eserve Bank to purchase the secur ities of central Govt. state Govt. and other autonomous
institutions. Apar t from this section 17(2) (A) empower R eserve Bank to
purchase or sell of shor t term bills.
Open market operations are used as suppor ting instrument of bank rate. This
method is used to inf luence the f low of credit. Sale and purchase of Govt.
secur ities inf luence the cash reserve ratio with the commercial banks and hence
these operations control their credit creation power. These operations will have
both anti-inf lationary and anti-def lationary effects. When the economy is faced
with the inf lationary pressures, the central bank would like the commercial banks
to contract the supply of credit. To achieve this ob jective the central bank would
sell the Govt. secur ities to the commercial banks. The banks would transfer a par t
of their cash reserve to the central bank towards the payment for these secur ities.
Consequently the cash reserve with the commercial banks will be reduced. It would lead to a contraction in the credit creation power of the commercial banks.
Similar ly, open market operations can also be used as anti -def lationary measures.
In this situation, the central bank will purchase secur ities from the commercial
banks. In this situation, the central bank will purchase secur ities from the
commercial banks. In the process. The cash reserves with the commercial banks
will increase and they would be enabled to create more credit.
The open market operations in India are limited by R eserve Bank. The bank has
used this policy only to make successful government debt policy and to maintain
pr ice stability of Govt. secur ities. It is used to fulf ill seasonal credit requirements
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3 ) Cash Reser ve Rati o (C RR):
The RBI controls credit through change in Cash R eserve R atio of commercial
banks. According to section 42(1) of RBI Act every schedule bank has to
maintain a cer tain percentage reserve of its time and demand deposits. This ratiocan be var ied from 3% to 15% as directed by the R eserve Bank. R eserve Bank
itself changed this ratio according to the credit requirement of the economy. It
has been changed several times in the history of R eserve Bank of India. The cash
reserve ratio affects on the lend able funds of commercial banks. If this ratio
increases the credit creation capacity of commercial banks decreases. On the
other hand if this ratio decreases the credit creation capacity of commercial banks
increases.
On 17 Apr il 2008, the R eserve Bank of India hiked the cash reserve ratio of
scheduled commercial banks, regional rural banks, scheduled state co-operative
banks and scheduled pr imary (urban) co-operative banks by 50 basis points to 8
per cent in two stages effective 26 Apr il 2008 and 10 May 2008. The monetary
author ity stated that as a result of the above increase in CRR on liabilities of the
bank ing system, an amount of about R s.18,500 crore of resources of banks would be absorbed. In this context, it may be noted that surplus liquidity in the bank ing
system amounted to R s.2, 43,566 crore as on 4 Apr il 2008. The R eserve Bank's
move comes at a time when there are only 12 days lef t for its monetary policy.
The monetary policy is due to be announced on 29 Apr il 2008.The hike in the
cash reserve ratio of banks is a measure aimed at reducing liquidity in the
bank ing system thereby reducing the money supply which in turn is expected to
hel p curb inf lation. The CRR hike will put margins of banks under a bit of a
pressure since they won¶t be earning anything on the money that they park with
the RBI as cash reserve. The CRR hike will put margins of banks under a bit of a
pressure since they won¶t be earning anything on the money that they park with
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in T-bills and f ive dated secur ities on the NSE. With gradual li beralization over
the years, all central govt. dated secur ities, state Govt. secur ity and T-bills of all
matur ities have been made eligi ble for repo. Banks and PDs can under take repo
deals if they are routed through the SGL, accounts maintained by the RBI. R epos
are allowed to develop a secondary market in PSU bonds, FIs bonds, corporate
bonds and pr ivate debt secur ities if they are held in demat form and the deals are
done through recognized stock exchange(s). There are no restr ictions regarding a
minimum per iod for inter-bank repo deals. Non-bank par tici pants (i.e., FIs and
other specif ied par tici pants) are allowed to par tici pate only in the reverse repo
that is they can only lend money to other eligi ble par tici pants. The non -bank
entities holding SGL accounts with the RBI can enter into reverse repo
transactions with banks/PDs, in all Government secur ities.
II . RB I Repos:
The RBI under takes repo/reverse repo operations with banks and PDs as par t of
its OMOs, to absorb/in ject liquidity. With the introduction of the LAF, the RBI
has been in jecting liquidity into the system through repo on a daily basis. The
repo auctions are conducted on all work ing days except Saturdays and arerestr icted to banks and PDs. This is in addition to the liquidity suppor t given by
the RBI to the PDs through ref inance/reverse repo facility at a f ixed pr ice.
Auctions under LAF were ear lier conducted on a uniform pr ic e basis, that is,
there was a single repo rate for all successful bidders. Multi ple pr ice auction was
introduces subsequently. The weighted average cut -off yield in case of a multi ple
pr ice auction is released top the public. This, along with the cut -off pr ice,
provides a band for call money to operate.
The RBI conducts repo auctions to provide banks with an outlet for managing
shor t-term liquidity; even out shor t-term liquidity f luctuations in the money
market; and optimize returns on shor t -term surplus liquid funds. The RBI has
switched over from discr iminatory pr ice auction repo to the daily f ixed rate repos
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auction system. Fixed rate repos are single money market rates, br ing about
order ly conditions in the forex market and impar t stability to shor t -term interest
rates by setting a f loor for call money rates. The RBI par tici pants actively in the
call money market with LAF repos operations conducted through the year to
modulate the surplus liquidity in th ree markets. It also conducts reverse repo
operations under the LAF to prevent sudden spur ts in the call rates. Both repos
and reverse repo operations play an effective role in impar ting stability to the
market.
The repo rate has become ak in to a singling rate, together with the B/R . the repo
rate serve the purpose of a f loor and the B/R that of a cap for the money market
to operate within an interest corrodor. With the introduction of var iable repo rates
and daily repo auctions, a market-determined benchmark is expected to emerge
for the call (overnight) rate. As a result of the conversion of the call/money
market into a pure inter-bank call/notice money market, the repo rate, along with
the B/R and CRR , emerged as an impor tant tool of liquidity and monetary
management.
To sum up, the RBI¶s regulation of money and credit now compr ises of (1) thereactivation of OMOs and introduction of repos, (2) the introduction of LAF and
its emergence as one of the signif icant operating instruments, (3) the reactivation
of B/R and the use of repo rate, (4) the continuat ion of the use of the CRR . The
B/R changes, combined with changes in the CRR and LAF repo rates have
emerged as active and impor tant tools of liquidity and monetary management.
The LAF has developed as an effective tool for absorbing/in jecting liquidity on a
day to day basis in a f lexi ble manner and for providing a corr idor for the call
money and other money markets.
On 29 July 2008, the R eserve Bank of India increased the repo rate by 50 basis
points to 9 per cent. Banks are aggressively using the repo facility of the RBI
since the beginning of July. They borrowed almost R s.38, 900 crore per day from
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the RBI through its liquidity ad justment facility. Therefore the hike in the repo
rate by the RBI will surely put some pressure on the cost of funds of banks.
As in the year of 2004 CRR was 4.50% and R epo stands at 6% and reverse repo
was 4.50% but at that time inf lation was around 4.6%, on September 18, inf lationrate zoom past to 7.9% but R epo and R everse repo rate remained unchanged and
CRR increases by 0.25 basis point to 4.75% consecutively on October 2,
increase in CRR by 0.25 point following high inf lation rate then from October,
2004 to july, 2006 there is continuous increase of 0.25 point each level in
R everse repo rate against which CRR stands unchanged at 5% and inf lation was
decreasing at that time, again from December, 2006 following high inf lation rate
CRR was hiked to 0.25 point and R epo rate was at 7.25% while R everse repo rate
remains unchanged to 6%.on January 2007 inf lation rose to 6.4 and CRR again
increased to 5.50 %.
On a review of the current macroeconomic and overall monetary conditions and
with a view to containing inf lation expectations, the repo rate under the Liquidity
Ad justment Facility (LAF) was raised by 25 basis points to 8.0 per cent with
effect from June 12, 2008. Consistent with the overall stance of monetary policyset out for 2008-09 in Apr il 2008 in terms of ensur ing a monetary and interest
rate environment that accords high pr ior ity to pr ice stability, well anchored
inf lation expectations and order ly conditions in f inancial markets and on the basis
of incoming information and domestic and global macroeconomic and f inancial
developments, it was decided on June 24, 2008 to increase the repo rate under the
LAF by 50 basis points to 8.50 per cent with effect from June 25, 2008 and the
CRR by 50 basis points to 8.75 per cent in two stages of 25 basis points each
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{B} Qualitative Methods of Credit Control
Under section 21 of RBI Act, R eserve Bank is empowered to regulate control and
direct the commercial banks regarding their loans and advances. Qualitative
methods are used to affect the use, distr i bution and direction of credit. It is usedto encourage such economic author ities as desirable and to discourage those
which are in jur ious for the economy. R eserve Bank of India from time to time
adopted the following qualitative methods of credit control.
1 ) S elective Cred it Cont rol:
Section 36(1) (a) of the Bank ing R egulation Act, empowers the RBI to contain or
prohi bit bank ing companies generally or any bank ing company. The ob jective of these controls is to discourage some forms of activities while encouraging others.
Such controls are used in respect of agr iculture commodities, which are sub ject to
speculative hoarding and wide pr ice f luctuation. Under section 21 of the bank ing
regulation Act, 1949, the R eserve Bank is empowered to issue directives to
bank ing companies regarding mak ing of advances. These dire ctions may be as
follows:
The purpose for which advances may or may not be made.
Fixing the margin requirements for advances against each commodity.
Fixing of maximum limit to be advanced by banks to a par ticular borrower.
Fixing of rate of interest and other terms for mak ing advances.
Fixing of maximum guarantees may be given by the banks on behalf of
any f irm or company.
Prohi bition on grant of credit against book debts and clean credits. Some of the
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(a ) Di fferenti al Di scount Rat es:
The reserve Bank f ixes different discounting rates for the bills of different
sectors. The sector for which more credit is to be made available the exchange
bills rediscounted at a lower rate. On the other hand, if RBI wants to discouragecredit for a par ticular sector, it increases the discount rate for bills or the facility
for rediscounting is post poned.
(b ) Cred it Author iz ati on S cheme:
This scheme was introduced with the ob jectives of enforce f inancial disci pline on
the larger borrowers and ensure that they did not pre-empt scare bank resources.
Through this scheme, the RBI regulates not only the quantum but also the term of credit f lows. Under this scheme, commercial banks are required to obtain RBI¶s
permission before sanctioning any fresh credit of R s. Six crore or more to any
single borrower. This limit may be changed time by time.
(c ) F i xati on of Marg i n:
The commercial banks generally advance loans to their customers against some
secur ity or secur ities offered by the borrowers and acceptable to the banks. The
commercial banks do not lend up to the full amount of the value of a secur ity but
lend an amount less than its value. The margin requi rements against specif ic
secur ities are determined by the R eserve Bank. RBI changed the margin
frequently according to the credit policy. Changes in margin requirements are
designed to inf luence the f low of credit against specif ic commodities. A r ise in
the margin requirements results in contraction in the borrowing value of the
secur ity and similar ly, a fall in the margin requirement results in expansion in the
borrowing value of the secur ity. If RBI desires that more loans should be
advanced against par ticular secur ities, it can lower the margin requirement.
Similar ly, if RBI desires to check the expansion of credit against par ticular
K.E.S. SHROFF COLLE GE OF ARTS & COMMERCE T . " .BBI (S eme#
$ e%
VI)
(8) Other Functions
The RBI performs following other functions:
(i) Agr iculture Credit
: All matters relating to agr iculture credit are looked af ter by RBI before the
establishment of NABAR D in 1982. Now all functions relating to agr iculture and
rural development are performed by NABAR D.
(ii) Industr ial Finance
: The RBI has contr i buted in the share capital of industr ial f inance institutions
such as Industr ial Finance Corporation of India, Industr ial Development Bank of
India, State Finance Corporations etc. Thus RBI indirectly contr i butes in the f ield
of industr ial f inance.
(iii) Publication of Data :
The RBI publishes statistics regarding money, pr ice, f inance etc, in its
per iodicals. This provides valuable information for Govt., business and
industr ies. These information are hel pful to take decisions. The impor tant publications of RBI are the R eserve Bank of India Annual R epor t, currency and
f inance, trends and progress of Bank ing etc. At present, there are more than 100
publications of RBI.
(iv) Bank ing Education and Training :
The RBI has been organizing var ious education and traini ng programmes for
bank employees and off icers. µBanker Training College¶ Mumbai has been setup by RBI for the training of Bank off icers. Other impor tant training institutes such
as ³College of Agr iculture Bank ing (Pune), R eserve Bank staff Training College
(Chennai) etc. had been setup by the RBI. RBI had also setup regional training