CONTENTS

What is RBI?
History of RBI
Structure of RBI
Functions of RBI
Policy rates and reserve ratios
Detection of fake currency

WHAT IS RBI
RBI stands for Reserve Bank of INDIA.
The Reserve Bank of India (RBI) is India's central
banking institution, which controls the monetary
policy of the Indian rupee.

 It was established on 1 April 1935 .

The share capital was divided into shares of 100 each
fully paid which was entirely owned by private
shareholders in the beginning.
Following India's independence in 1947, the RBI was

nationalized in the year 1949.

HISTORY OF RBI
1950 -1960 : In the 1950s, the Indian government,
under its first Prime Minister Jawaharlal Nehru,
developed a centrally planned economic policy that
focused on the agricultural sector
1960 -1969 :the RBI was requested to establish and
monitor insurance system. It should restore the trust
in the national bank system and was initialized on 7
December 1961.

HISTORY OF RBI (contd.)

1969 -1985: In 1969, the Indira Gandhi-headed
government nationalized 14 major commercial
banks. Upon Gandhi's return to power in 1980, a
further 6 banks were nationalized. The regulation of
the economy and especially the financial sector was
reinforced by the Government of India in the 1970s
and 1980s.

HISTORY OF RBI (contd.)

1985-1991:A lot of committees analysed the
Indian economy between 1985 and 1991. Their
results had an effect on the RBI. The Board for
Industrial and Financial Reconstruction, the Indira
Gandhi Institute of Development Research and the
Security & Exchange Board of India investigated the
national economy as a whole.
1991 -2000:The national economy came down in
July 1991 and the Indian rupee was devalued. The
currency lost 18% relative to the US dollar.

Structure of RBI
Central Board of Directors
Local Boards
Offices of RBI

Functions of Reserve
Bank of India
A. Traditional Functions

B. Promotional Functions

C. Supervisory /regulatory functions

Traditional Functions
1.
2.
3.
4.
5.
6.

Issue of currency monopoly of note issue

Banker agent and advisor to government
Bankers bank
Lender of the last resort
Controller of Credit
Custodian of foreign Reserve

Promotional / Developmental
Functions
1.Branch expansion policy
2.Industrial & agricultural finance
3.Protecting the interest of depositors and creditors
4.Helping co-operative sectors and small scale
industries
5.Providing refinance for export promotion

Supervisory / regulatory
functions
1.Granting licence to banks
2.Approval of capital, reserves and liquid assets of
banks
3.Inspection of banks
4.Control over management ,methods,amalagamation
and liquidation
5.Audit ,periodical review and working of banks

Policy rates and

reserve ratios
Repo Rate
Reverse-Repo Rate
Bank Rate
Cash Reserve Ratio (CRR)
Statutory Liquidity Ratio (SLR)

 Repo rate is the rate at which the RBI lends

shot-term money to the banks against
securities.
Reverse Repo rate is the rate at which banks
park their short-term excess liquidity with the
RBI.
Bank Rate is the rate at which central bank of
the country allows finance to commercial
banks. Bank Rate is a tool, which central
bank uses for short-term purposes.

 CRR: Under this a certain percentage of the total

bank deposits has to be kept in current account
with RBI. RBI uses CRR either to drain excess
liquidity or to release funds needed for the
growth of the economy from time to time.
SLR: Every bank is required to maintain 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).
Current rates

Fake currency
It is the currency which is produced without
legal sanction of the state or government.
According to RBI 4,35,607 fake currencies
were detected in 2010-2011.
According to Livemint report 4 in every 1000
currency note in circulation are fake
amounting to 3,200 Crores in 2010.

MEASURES TAKEN TO Detect

Fake currency
Awareness and publicity campaign
Replacement of old series with new
ATMs to be equipped with sensors for
detection of fake notes
Installation of Note sorting Machine
Creation of Forged Notes Vigilance cells

TEXTRON JUMBO
Textron Jumbo FND is
capable of detecting
fake notes of Rs. 1000,
500, 100, 10.
Also it is having Ozone
lamp for watermark
Detections
with
magnifying glass built
in.

PEHCHANO PAISE KI BOLI

KYUNKI PAISA BOLTA HAI
RBI has launched a much needed website
called Paisa Bolta Hai that explains how
consumers can detect a fake currency in
circulation.

THANK YOU