Recommend by Hilton young commission. 20 Members (Directors), Governor & 4 Deputy Governor, one member recommended by Minister of Financial & 10 Directors recommend by Central Government & Four Directors recommend by Central Government at Four Headquarters at Kolkata, Delhi, and Mumbai & Chennai. Governor of Reserve Bank of India is Shaktikanta Das (2021)
Functions of the Reserve Bank of India
| Bank of Issue | Banker to government | Controller of Credit |
| Separate of issue department for print currency notes. Any coins, notes in any denomination it can print, sole authority. ₹4,669,426 crore (US$620 billion) (FY-2020 -2021) According to Business Standard Report, 705.6 tonnes, as of June 30, 2021. | Transact government business transactions, in behalf of government. Adviser, agent government banker. It helps both governments C/ S. Also help to commercial banks at the time of cries. Last resort of the Government | Every bank need to get license for every branch. RBI can called bank license at anytime. Can interrogate commercial bank accounts. Has the power to tell other banks to not give or lend money to particular group. |
Agent & Adviser of Government
- Accept public debt behalf of government as an agent.
- Provide T-bills, securities.
- Act as financial advices in all financial matters.
Functions as national clearing house
- Twice a day, Cheques clearing in banks.
- Banks can settle their interbank claims.
- RBI can lend money to commercial banks à through genuine trade bills which are usually available at repo rate / MSF.
Custodian of foreign Reserves
- It acts as India’s reserve for international currencies.
- $286 b foresees reserves.
- It watches the movement of market though ensure order and these is no volatility.
- It takes up operation to stabilize the rate of Indian rupee in the market.
| Supervisory functions | Promotional functions |
| Granting license to banks. Inspect the accounts of commercial banks. Implementation of insurance deposit scheme. On site & off site verification. Whole control of operation under bank regulating act 1949 & RBI act 1934. | Banker’s bank Lender’s last resort. Holds country’s gold & foreign exchange reserve Government banker. Used to manage both inflation & Deflation. |
Money supply
- Total volume of money circulating in the economy M0
- Narrow M1: à equals the sum of money with public and the demand deposits with the banks.
- Broad money or M3: Time deposits (fixed deposits) in the post office savings bank account deposits.
- M2 = M1 + Post office savings.
- M4 = M3 + National saving.
