Reserve Bank of India - One liners

 Jay Shree Ram! Welcome to one liners related to Reserve Bank of India.

1) Royal Commission on Indian Currency and Finance – also known as the Hilton-Young Commission – recommended the creation of a central bank for India to separate the control of currency and credit from the Government and to augment banking facilities throughout the country.

2) The Reserve Bank of India Act of 1934 established the Reserve Bank and set in motion a series of actions culminating in the start of operations in 1935.

3) In 1933, The White Paper on Indian Constitutional Reforms recommended the creation of a Reserve Bank.

4) The Reserve Bank commenced operations as India’s central bank on April 1, 1935.

5) RBI was operating as a private shareholders’ bank during its initial working years.

6) RBI was having  paid up capital of rupees five crore in 1935.

7) In 1942, The Reserve Bank ceased to be the currency issuing authority of Burma (now Myanmar).

8) In 1947, The Reserve Bank stopped acting as banker to the Government of Burma.

9) In 1948, The Reserve Bank stopped rendering central banking services to Pakistan.

10) In 1949, The Government of India nationalised the Reserve Bank under the Reserve Bank (Transfer of Public Ownership) Act, 1948.

11) The functions of the Reserve Bank today can be categorised as a) Monetary policy b) Regulation and supervision of the banking and non-banking financial institutions, including credit information companies c) Regulation of money, forex and government securities markets as also certain financial derivatives d) Debt and cash management for Central and State Governments e) Management of foreign exchange reserves f) Foreign exchange management—current and capital account management g) Banker to banks h) Banker to the Central and State Governments i) Oversight of the payment and settlement systems j) Currency management k) Developmental role l) Research and statistics

12) As per preamble of RBI Act, 1934 the objectives of RBI are a) to regulate the issue of Bank notes, b) to keep the reserves for securing monetary stability in country, c) to operate the currency and credit system in country.

13) The Reserve Bank designs and implements the regulatory policy framework for banking and non-banking financial institutions with the aim of providing people access to the banking system, protecting depositors’ interest, and maintaining the overall health of the financial system.

14) Before 1947, the Reserve Bank carried out the regulation of foreign exchange transactions under the Defence of India Rules, 1939

15) After 1947, the Reserve Bank carried out the regulation of foreign exchange transactions under the Foreign Exchange Regulation Act of 1947.

16) The Central Board of Directors is at the top of the Reserve Bank’s organisational structure.

17) The Central Board of Directors of RBI is appointed by the Government under the provisions of the Reserve Bank of India Act, 1934.

18) The Governor is the Reserve Bank’s chief executive.

19) The Central Government nominates fourteen Directors on the Central Board, including one Director each from the four Local Boards. The other ten Directors represent different sectors of the economy, such as, agriculture, industry, trade, and professions.

20) All these appointments of directors of RBI are made for a period of four years.

21) The Government also nominates one Government official as a Director representing the Government, who is usually the Finance Secretary to the Government of India. There is no specific period of appointment of this director post.

22)  Reserve Bank Governor and a maximum of four Deputy Governors are also ex officio Directors on the Central Board of RBI.

23) The Reserve Bank also has four Local Boards, constituted by the Central Government under the RBI Act, one each for the Western, Eastern, Northern and Southern areas of the country, which are located in Mumbai, Kolkata, New Delhi and Chennai.

24)  Each of these Boards has five members appointed by the Central Government for a term of four years.

25) Mumbai has the Central office of Head office of RBI.

26) The Board for Financial Supervision (BFS) was constituted in November 1994 under Section 58 of the RBI Act.

27) Board for Financial Supervision (BFS) undertakes integrated supervision of banks, financial institutions and non-banking financial companies (including Primary Dealers).

28) The Reserve Bank Governor is the Chairman of the BFS.

29) One Deputy Governor, usually the Deputy Governor in-charge of banking regulation and supervision, is nominated as the Vice-Chairperson of BFS

30) The BFS has constituted an Audit Sub-Committee under the BFS Regulations to assist the Board in improving the quality of the statutory audit and internal audit in banks and financial institutions.

31) The Board for Regulation and Supervision of Payment and Settlement Systems provides an oversight and direction for policy initiatives on payment and settlement systems within the country.

32) The BPSS lays down policies for regulation and supervision of payment and settlement systems, sets standards for existing and future systems, authorises such systems, and lays down criteria for their membership.

33) The Deposit Insurance Corporation and Credit Guarantee Corporation of India were merged and the present Deposit Insurance and Credit Guarantee Corporation (DICGC) came into existence on July 15, 1978.

34) Deposit Insurance and Credit Guarantee Corporation (DICGC), established under the DICGC Act 1961, is one of the wholly owned subsidiaries of the Reserve Bank of India.

35) The DICGC insures all deposits (such as savings, fixed, current, and recurring deposits) with eligible banks except the following: (i) Deposits of foreign Governments; (ii) Deposits of Central/State Governments; (iii) Inter-bank deposits; (iv) Deposits of the State Land Development Banks with the State cooperative bank; (v) Any amount due on account of any deposit received outside India; (vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.

36) Every eligible bank depositor is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him.

37) National Housing Bank was set up on July 9, 1988 under the National Housing Bank Act, 1987.

38) National Housing Bank is  wholly-owned subsidiary of the Reserve Bank to act as an apex level institution for housing.

39)  NHB has been established to achieve, among other things, the following objectives: * To promote a sound, healthy, viable and cost effective housing finance system to all segments of the population and to integrate the housing finance system with the overall financial system. * To promote a network of dedicated housing finance institutions to adequately serve various regions and different income groups. * To augment resources for the sector and channelise them for housing. * To make housing credit more affordable. * To regulate the activities of housing finance companies based on regulatory and supervisory authority derived under the Act. * To encourage augmentation of supply of buildable land and also building materials for housing and to upgrade the housing stock in the country. * To encourage public agencies to emerge as facilitators and suppliers of serviced land for housing.

40) The Reserve Bank of India as the central bank of the country, is at the head of the group of banks.

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