The Reserve Bank of India (RBI) is the nation’s central bank fundamental commitment to maintaining the nation’s monetary and financial stability.
From ensuring stability of interest and exchange rates to providing liquidity and an adequate supply of currency and credit for the real sector; from ensuring bank penetration and safety of depositors’ funds to promoting and developing financial institutions and markets, and maintaining the stability of the financial system through continued macro-financial surveillance, the Reserve Bank plays a crucial role in the economy. Our decisions touch the

RBI at a Glance Managed by Central Board of Directors India’s monetary authority Supervisor of financial system Issuer of currency Manager of foreign exchange reserves Banker and debt manager to government Supervisor of payment system Banker to banks Maintaining financial stability Developmental functions Research, data and knowledge Sharing

Central Board of Directors by the Numbers
Official Directors 1 Governor 4 Deputy Governors, at a maximum
Non-Official Directors 4 directors—nominated by the Central Government to represent each local board 10 directors nominated by the Central Government with expertise in various segments of the economy 1 representative of the Central Government 6 meetings—at a minimum—each year 1 meeting—at a minimum—each quarter
Monetary Authority Issuer of Currency Banker and Debt Manager to Government Banker to Banks Regulator of the Banking System Manager of Foreign Exchange Maintaining Financial Stability Regulator and Supervisor of the Payment and Settlement Systems Developmental Role
The basic functions of the Reserve Bank of India are 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.

- From the Preamble of the Reserve Bank of India Act, 1934

The main objectives of monetary policy in India are: Maintaining price stability Ensuring adequate flow of credit to the productive sectors of the economy to support economic growth Financial stability
Direct Instruments Cash Reserve Ratio (CRR): The share of net demand and time liabilities that banks must maintain as cash balance with the Reserve Bank. Statutory Liquidity Ratio (SLR): The share of net demand and time liabilities that banks must maintain in safe and liquid assets, such as government securities, cash and gold. Refinance facilities: Sector-specific refinance facilities (e.g., against lending to export sector) provided to banks.

Indirect Instruments Liquidity Adjustment Facility (LAF): Consists of daily infusion or absorption of liquidity on a repurchase basis, through repo (liquidity injection) and reverse repo (liquidity absorption) auction operations, using government securities as collateral. Repo/Reverse Repo Rate: These rates under the
Liquidity Adjustment Facility (LAF) determine the corridor for short-term money market interest rates.
In turn, this is expected to trigger movement in other segments of the financial market and the real economy. Open Market Operations (OMO): Outright sales/purchases of government securities, in addition to LAF, as a tool to determine the level of liquidity over the medium term. Marginal Standing Facility (MSF): was instituted under which scheduled commercial banks can borrow over night at their discretion up to one per cent of their respective NDTL at 100 basis points above the repo rate to provide a safety valve against unanticipated liquidity shocks Bank Rate: It is the rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other commercial papers. It also signals the medium-term stance of monetary policy. Market Stabilisation Scheme (MSS): This instrument for monetary management was introduced in 2004. Liquidity of a more enduring nature arising from large capital flows is absorbed through sale of short-dated government securities and treasury bills. The mobilised cash is held in a separate government account with the Reserve Bank.
Along with Government of India, we are responsible for the design, production and overall management of the nation’s currency, with the goal of ensuring an adequate supply of clean and genuine notes. The Government of India is the issuing authority of coins and supplies coins to the Reserve Bank on demand. The Reserve Bank puts the coins into circulation on behalf of the Central Government. In consultation with the Government of India, we work towards maintaining confidence in the currency by constantly endeavouring to enhance integrity of banknotes through new design and security features.

Like individual consumers, businesses and organisations of all kinds, banks need their own mechanism to transfer funds and settle inter-bank transactions—such as borrowing from and lending to other banks—and customer transactions. As the banker to banks, the Reserve Bank fulfills this role. In effect, all banks operating in the country have accounts with the Reserve Bank, just as individuals and businesses have accounts with their banks. Banks are fundamental to the nation’s financial system. The central bank has a critical role to play in ensuring the safety and soundness of the banking system—and in maintaining financial stability and public confidence in this system. As the regulator and supervisor of the banking system, the Reserve
Bank protects the interests of depositors, ensures a framework for orderly development and conduct of banking operations conducive to customer interests and maintains overall financial stability through preventive and corrective measures.
The RBI was established in 1935. It was nationalised in 1949. The RBI plays role of regulator of the banking system in India. The Banking Regulation Act 1949 and the RBI Act 1953 has given the RBI the power to regulate the banking system.
The RBI has different functions in different roles. Below, we share and discuss some of the functions of the RBI.
RBI is the Regulator of Financial System
The RBI regulates the Indian banking and financial system by issuing broad guidelines and instructions. The objectives of these regulations include: * Controlling money supply in the system, * Monitoring different key indicators like GDP and inflation, * Maintaining people’s confidence in the banking and financial system, and * Providing different tools for customers’ help, such as acting as the “Banking Ombudsman.”

RBI is the Issuer of Monetary Policy
The RBI formulates monetary policy twice a year. It reviews the policy every quarter as well. The main objectives of monitoring monetary policy are: * Inflation control * Control on bank credit * Interest rate control
The tools used for implementation of the objectives of monetary policy are: * Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), * Open market operations, * Different Rates such as repo rate, reverse repo rate, and bank rate.

RBI is the Issuer of Currency
Section 22 of the RBI Act gives authority to the RBI to issue currency notes. The RBI also takes action to control circulation of fake currency.
RBI is the Controller and Supervisor of Banking Systems
The RBI has been assigned the role of controlling and supervising the bank system in India. The RBI is responsible for controlling the overall operations of all banks in India. These banks may be: * Public sector banks * Private sector banks * Foreign banks * Co-operative banks, or * Regional rural banks
The control and supervisory roles of the Reserve Bank of India is done through the following: * Issue Of Licence: Under the Banking Regulation Act 1949, the RBI has been given powers to grant licenses to commence new banking operations. The RBI also grants licenses to open new branches for existing banks. Under the licensing policy, the RBI provides banking services in areas that do not have this facility. * Prudential Norms: The RBI issues guidelines for credit control and management. The RBI is a member of the Banking Committee on Banking Supervision (BCBS). As such, they are responsible for implementation of international standards of capital adequacy norms and asset classification. * Corporate Governance: The RBI has power to control the appointment of the chairman and directors of banks in India. The RBI has powers to appoint additional directors in banks as well. * KYC Norms: To curb money laundering and prevent the use of the banking system for financial crimes, The RBI has “Know Your Customer“ guidelines. Every bank has to ensure KYC norms are applied before allowing someone to open an account. * Transparency Norms: This means that every bank has to disclose their charges for providing services and customers have the right to know these charges. * Risk Management: The RBI provides guidelines to banks for taking the steps that are necessary to mitigate risk. They do this through risk management in basel norms. * * Audit and Inspection: The procedure of audit and inspection is controlled by the RBI through off-site and on-site monitoring system. On-site inspection is done by the RBI on the basis of “CAMELS”. Capital adequacy; Asset quality; Management; Earning; Liquidity; System and control. * Foreign Exchange Control: The RBI plays a crucial role in foreign exchange transactions. It does due diligence on every foreign transaction, including the inflow and outflow of foreign exchange. It takes steps to stop the fall in value of the Indian Rupee. The RBI also takes necessary steps to control the current account deficit. They also give support to promote export and the RBI provides a variety of options for NRIs. * Development: Being the banker of the Government of India, the RBI is responsible for implementation of the government’s policies related to agriculture and rural development. The RBI also ensures the flow of credit to other priority sectors as well. Section 54 of the RBI gives stress on giving specialized support for rural development. Priority sector lending is also in key focus area of the RBI.
Apart from the above, the RBI publishes periodical review and data related to banking. The role and functions of the RBI cannot be described in a brief write up. The RBI plays a very important role in every aspect related to banking and finance. Finally the control of NBFCs and others in the financial world is also assigned with RBI.
Does a career in banking interest you? Take our Practice TimesPro Aptitude Test below to see where you stand for one of our banking courses.

The power to appoint is granted solely to the Central Government under S.8 of the RBI Act. The Governor typically has a term of 4 years, which can be extended but usually isn't.

The Governor can be removed from office any any time by the Central Government. It suffices to say that s/he holds office at the pleasure of the Central Government. 1. Gross Domestic Product 2. DEFINITION of 'Gross Domestic Product - GDP' The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis.

black money noun 1. income illegally obtained or not declared for tax purposes.

In India, Black money refers to funds earned on the black market, on which income and other taxes have not been paid. The total amount of black money deposited in foreign banks by Indians is unknown. Some reports claim a total exceeding US$1.4 trillion are stashed in Switzerland. 1. Description: WPI is used as an important measure of inflation in India. Fiscal and monetary policy changes are greatly influenced by changes inWPI. In the United States, Producer Price Index (PPI) is used to measure inflation.

1. Inflation is the percentage change in the value of the Wholesale Price Index (WPI) on a year-on year basis. Definition: Inflation is the percentage change in the value of the Wholesale Price Index (WPI) on a year-on year basis.

April 18, 2013:
Ever wondered why the rupee quotes at 53.2 or 50 and not at Rs. 20 or Rs. 80 to a dollar?
It’s not much different from how the prices of your mangoes are determined, for example. Whether currency movements or prices of mangoes, the most important factor determining their price is the same – market forces of demand and supply.
If the demand for dollars increases, the value of dollar will appreciate. As the quotation for Rs/$ is a two way quote (that is, the price of one dollar is quoted in terms of how much rupees it takes to buy one dollar), an appreciation in the value of dollar would automatically mean a depreciation in Indian rupee and vice-versa.
For example, if rupee depreciates, a dollar which once cost Rs. 47 would cost, say, Rs. 50. In essence, the value of dollar has risen and the buying power of rupee has gone down.
Besides the primary powers of demand and supply, the rupee-dollar rates are determined by other market forces as well.
Market sentiments
During turbulent markets, investors usually prefer to park their money in safe havens such as US treasuries, Swiss franc, gold and so on to avoid losses to their portfolios. This flight to safety would lead to foreign investors redeeming their investments from India. This could increase the demand for dollar vis-à-vis Indian rupees.
Speculation
There are derivative instruments and over-the-counter currency instruments through which one can speculate/ hedge the underlying currency rates. When speculators sense improvements/ deterioration of the sentiments of the markets, they too want to benefit from such rising/ falling dollar. They then start buying/selling dollar which would further change the demand/ supply of the dollar.
RBI Intervention
When there is too much volatility in the rupee-dollar rates, the RBI prevents the rates from going out of control to protect the domestic economy. The RBI does this by buying dollars when rupee appreciates too much and by selling dollars when the rupee depreciates significantly.
Imports and Exports
Ever give thought as to why our government is trying to incentivise exports and reduce imports? There are a lot of schemes and incentives for exporters while importers are burdened with many conditions and taxes. This is to protect our economy from high rupee depreciation. Importing foreign goods requires us to make payment in dollars thus strengthening the dollar’s demand. Exports do the exact reverse.
Public Debt / Fiscal policy
Whenever our Government fails to match expenses with equivalent revenue, there is a shortage of funds. To finance this, the Government at times opts to borrow money from institutions such as the World Bank and the IMF. This debt, accrued interests, and the payments made, also lead to currency fluctuations.
Interest Rates
The prevailing interest rates on the government bonds attract foreign capital to India. If the rates are high enough to cover the foreign market risk and if the foreign investor is comfortable with the fundamentals or credit ratings, money would start pouring into India and thus provide us with a supply of dollars. 1. Fiscal deficit is the difference between the government's expenditures and its revenues (excluding the money it's borrowed). A country's fiscal deficit is usually communicated as a percentage of its gross domestic product (GDP).

DEFINITION of 'Trade Deficit' An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.
What is Bank Rate ? (For Non Bankers) : This is the rate at which central bank (RBI) lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up, and vice-versa. Thus, it can said that in case bank rate is hiked, in all likelihood banks will hikes their own lending rates to ensure that they continue to make profit.

What is CRR? The Reserve Bank of India (Amendment) Bill, 2006 has been enacted and has come into force with its gazette notification. Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the needs of securing the monetary stability in the country, RBI can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. [Before the enactment of this amendment, in terms of Section 42(1) of the RBI Act, the Reserve Bank could prescribe CRR for scheduled banks between 3 per cent and 20 per cent of total of their demand and time liabilities].
What is SLR? Every bank is required to maintain at the close of business every day, a minimum proportion of their Net Demand and Time Liabilities as liquid assets in the form of cash, gold and un-encumbered approved securities. The ratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio (SLR). RBI is empowered to increase this ratio up to 40%. An increase in SLR also restrict the bank’s leverage position to pump more money into the economy. What is SLR ? (For Non Bankers) : SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some other approved securities to liabilities (deposits) It regulates the credit growth in India.
News Dated 5th August 2014 : RBI Monetary Policy Update - SLR reduced by 50 bps (wef 9/8/2014) . New SLR rate is 22.0%. No Other Rate Changes Done.
What are Repo rate and Reverse Repo rate? Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate

Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate means that the RBI is ready to borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep more and more surplus funds with RBI.
RBI TermsPresentation Transcript * 1. BANK RATEThis is the rate at which central bank (RBI) lends money toother banks or financial institutions. If the bank rate goesup, long-term interest rates also tend to move up, and vice-versa. Thus, it can said that in case bank rate is hiked, inall likelihood banks will hikes their own lending rates toensure and they continue to make a profit. * 2. CASH RESERVE RATIOCash reserve Ratio (CRR) is the amount of funds that the banks have to keep withRBI. If RBI decides to increase the percent of this, the available amount with thebanks comes down. RBI is using this method (increase of CRR rate), to drain outthe excessive money from the banks.RBI uses CRR either to drain excess liquidity or to release funds needed for theeconomy from time to time. Increase in CRR means that banks have less fundsavailable and money is sucked out of circulation. Thus we can say that this servesduel purposes i.e. it not only ensures that a portion of bank deposits is totallyrisk-free, but also enables RBI to control liquidity in the system, and thereby,inflation by tying the hands of the banks in lending money. * 3. STATUTORY LIQUIDITY RATIOEvery bank is required to maintain at the close of businessevery day, a minimum proportion of their Net Demand andTime Liabilities as liquid assets in the form of cash, gold andun-encumbered approved securities. The ratio of liquid assetsto demand and time liabilities is known as Statutory LiquidityRatio (SLR).RBI is empowered to increase this ratio up to40%. An increase in SLR also restrict the bank’s leverageposition to pump more money into the economy. * 4. Repo (Repurchase) rate The rate at which the RBI lends shot-term money to the banks. When the repo rateincreases borrowing from RBI becomes more expensive. Therefore, we can say thatin case, RBI wants to make it more expensive for the banks to borrow money, itincreases the repo rate; similarly, if it wants to make it cheaper for banks toborrow money, it reduces the repo rate Reverse Repo Rate is the rate at which banks park their short-term excess liquidity with theRBI. The RBI uses this tool when it feels there is too much money floating in thebanking system. An increase in the reverse repo rate means that the RBI willborrow money from the banks at a higher rate of interest. As a result, banks wouldprefer to keep their money with the RBI * 5. PRIME LENDING RATEThe interest rate that commercial banks charge their best, most credit-worthycustomers. Generally a banks best customers consist of large corporations. Therate is determined by the Federal Reserves decision to raise or lower prevailinginterest rates for short-term borrowing. Though some banks charge their bestcustomers more and some less than the official prime rate, the rate tends tobecome standard across the banking industry when a major bank moves its primeup or down. The rate is a key interest rate, since loans to less-creditworthycustomers are often tied to the prime rate. Many consumer loans, such as homeequity, automobile, mortgage, and credit card loans, are tied to the prime rate. * 6. Base RateIt is the minimum rate of interest that a bank is allowed to charge from its customers.Unless mandated by the government, RBI rule stipulates that no bank can offer loans at arate lower than BR to any of its customers.Base Rate System is for the banks to set a level of minimum interest rates charged whilegiving out the loans. This Base Rate System has many advantages over the older methodof Prime Lending Rate (PLR). One advantage is, in the Prime Lending Rate (PLR), onecould sanction the loan for lower price for the preferred customer or the corporate bodiesand retail customers may have to pay more for the same type of loans. In the base ratesystem, there will not be much variance on the loans.However, the base rate system will not be applicable for the following type of loans:•Agricultural Loans•Loans given to own employees•Loans against deposit•Export Credit. * 7. HOW IS IT DIFFERENT FROM BANK PRIME LENDING RATE?BR is a more objective reference number than the bank prime lending rate(BPLR) -- the current benchmark. BPLR is the rate at which a bank is willing tolend to its most trustworthy, low-risk customer. However, often banks lend atrates below BPLR. For example, most home loan rates are at sub-BPLR levels.Some large corporates also get loans at rates substantially lower than BPLR.For all banks, BR will be much lower than their BPLR * 8. Particulars Current rate LAST RATE BANK RATE 6% (w.e.f. 29-4-2003) CRR 6% (w.e.f.24-4-2010 ) 5.75% SLR 24% (w.e.f.18-12-2010) 25%REVERSE REPO 5.50% (w.e.f. 25-1-2011) 5.25% REPO 6.50% (w.e.f. 25-1-2011 ) 6.25% * 9. THANK YOU ncome Range | General (non-senior citizens) Category | Women (Below 60 years of age)(This category is abolished from this year and is thus is same as that of General Category | Senior Citizens (Men and Women above 60 years of age), but below 80 years | Very Senior Citizens (Men and Women above 80 years of age) | Upto Rs. 2,50,000 | Nil | Nil | Nil | Nil | Rs. 2,50,001 to Rs. 3,00,000 | 10% * | 10% * | Nil | Nil | Rs. 3,00,001 to Rs. 5,00,000 | 10% * | 10% * | 10% * | Nil | Rs. 5,00,001 to Rs. 10,00,000 | 20% | 20% | 20% | 20% | Above Rs. 10,00,000 | 30% ** | 30% ** | 30% ** | 30%** | | | | | |

Bank Rate | 9.00% (w.e.f. 28/01/2014) | Increased from 8.75% which was continuing since 29/10/2013 | Cash Reserve Ratio (CRR) | 4.00% (wef 09/02/2013) -announced on 29/01/2013 | Decreased from 4.25%which was continuing since 30/10/2012 | Statutory Liquidity Ratio (SLR) | 22.00%(w.e.f. 09/08/2014) (announced on 05/08/2014) | Decreased from 22.50% which was continuing since 14/06/2014 | Repo Rate under LAF | 8.00% (w.e.f.28/01/2014) | Increased from 7.75% which was continuing since 29/10/2013 | Reverse Repo Rate under LAF * | 7.00% (w.e.f.28/01/2014) | Increased from 6.75% which was continuing since 29/10/2013 | Marginal Standing Facility (MSF) ** | 9.00% (w.e.f. 28/01/2014) | Increased from 8.75% which was continuing since 29/10/2013 | The concept of Marginal Standing Facility was announced by RBI wef 03/05/2011 (However implemented wef 09/05/2011). At that time it was decided that Marginal Standing Facility i.e. MSF rate will be linked to Repo rate and will be 100 bps above the Repo Rate (till RBI decides to change the same). WEF 15/07/2013, RBI has announced that from now onwards the MSF Rate will be 300 basis points above the Repo Rate. Once again MSF rates were revised wef 20/09/2013 to 9.50%, which is 200 bps above the Repo Rate, Wants to Know More About MSF - Click Here : What is Marginal Standing Facility or What is MSF? Saving Deposits - For residents RBI has amended the rate of interest on SF accounts in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 | Deregulated by RBI wef 25/10/2011 | It remained regulated by RBI till 24th October, 2011.(a) It was 4% between 3/5/2011 to 24/10/2011; (b) It was 3.50% between 1/3/2003 to 2/5/2011) |

(Click Here to see the latest guidelines for SF accounts and Highest Rate of Interest on Saving Fund Accounts )

Saving Deposits under NRO and NRE categories | 4% wef (03/05/2011) | Increased from 3.50% which was continuing since 1st March, 2012 |

Job Profile:
Reserve Bank of India jobs are one of the most respected and prestigious jobs in India. You get a very brilliant opportunity to enhance your career prospects after joining RBI in Assistant Grade. However, RBI Assistant is a clerical job and you will perform responsibilities like entry of inward and outward of mail, data entry etc. But you get an opportunity to get promoted to officer cadre after 3 years. There will be an internal examination for employees of Assistant Grade and successful employees will get promoted as Assistant Manager.
Caareer Graph:
RBI employees are grouped in following hierarchies:
Officers (Class 1): There are grade A to F of officers. Grade A is lowest and Grade F is the senior most.
Assistant (Class 3 and 4): Senior Assistant, special assistant, Assistant, record clerk, attendant (maintenance, catering etc.), security guards etc.
As I have mentioned above, after joining in Assistant Grade and working for 3 years, you can opt for the departmental promotional examination to get promoted to Assistant Manager. So, this is a very good opportunity to join RBI even if you are not able to crack RBI Grade B officers exam. You can eventually become an officer in RBI in future joining as Assistant. Assistant grade employees will initially be posted in their home state or at the nearest office. There may be transfer to offices within the circle (North, East, West, South), but not outside the circle. But, after getting promoted to Officers Grade, you must be ready for transfer because initial posting for officers are given outside theservice.

dfghs