Economics :- Banking System
Reserve
Bank of India (RBI)
The RBI
was established by passing “trasfer of public ownership Act” in Sep-1948 under
which the ownership of the bank was passed into the hands of the Government of
India with effect from 1st January 1949.
RBI Functions
1.
Traditional
functions
·
Monopoly of currency notes issue
·
Banker to the Government (both the central and state)
·
Agent and advisor to the Government
·
Banker to the bankers
·
Acts as the clearing house of the country
·
Lender of the last resort
·
Custodian of the foreign exchange reserves
·
Maintaining the external value of domestic currency
·
Controller of forex and credit
·
Ensures the internal value of the currency
·
Publishes the Economic statistical data
·
Fight against economic crisis and ensures stability of Indian
economy.
2.
Promotional
functions
·
Promotion of banking habit and expansion of banking systems.
·
Provides refinance for export promotion
·
Expansion of the facilities for the provision of the
agricultural credit through NABARD
·
Extension of the facilities for the small scale industries
·
Helping the Co-operative sectors.
·
Prescribe the minimum statutory requirement.
·
Innovating the new banking business transactions.
3.
Supervisory
functions
·
Granting licence to Banks.
·
Inspects and makes enquiry or determine position in respect
of matters under various sections of RBI and Banking regulations
·
Implements Deposit insurence scheme
·
Periodical review of the work of the commercial banks
·
Giving directives to commercial banks
·
Control the non-banking finance corporation
·
Ensuring the health of financial system through on-site and
off-site verification.
NBFCS
(Non-Banking Financial Coorporations)
They
are discribed by acronym: CAMELS
C: Capital
Adequacy requirement
A:
Asset quality like standerd ect. asset
M:
Management of the level and expertise and praisal capacity of management
E:
Earning capacity
L:
Liquidity, the level of liquidity and the components of liquidity are verified
S:
System and control exist in the NBFC, and its effectiveness.
