Essay on Finance

31974 Words Dec 10th, 2011 128 Pages
Reserve Bank of India: Functions and Working

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Foreword
The Reserve Bank of India, the nation’s central bank, began operations on April 01, 1935. It was established with the objective of ensuring monetary stability and operating the currency and credit system of the country to its advantage. Its functions comprise monetary management, foreign exchange and reserves management, government debt management, financial regulation and supervision, apart from currency management and acting as banker to the banks and to the Government. In addition, from the beginning, the Reserve Bank has played an active developmental role, particularly for the agriculture and rural
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Index on Boxes
S. No. Name of the Box Item 1 2 3 4 5 6 7 8 9 10 11 12 Origins of the Reserve Bank of India Functions of the Reserve Bank Central Office Departments Monetary Policy Transmission Currency Unit and Denomination Banker to Banks Prudential Norms Investment of Reserves Foreign Exchange Reserves Management: The RBI’s Approach Payment and Settlement System: Evolution and Initiatives Institutions to meet Needs of the Evolving Economy Page No. 8 8 15 24 28 36 41 53 54 64 73

Improving Banking Services in Comparatively Backward States 74

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Overview

The origins of the Reserve Bank of India can be traced to 1926, when the 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. 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. Since then, the Reserve Bank’s role and functions have undergone numerous changes, as the nature of the

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