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PRESENTED BY

YADNESH KENE

SUBMITTED TO

Mrs. RENUKA MADAM

REGULATORY ROLE OF RBI AND

MONETARY POLICY

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INTRODUCTION The Reserve Bank of India (RBI) is India's central banking institution,

which formulates the monetary policy with regard to the Indian rupee.

It was established on 1 April 1935 during the British raj in accordance

with the provisions of the Reserve Bank of India Act, 1934.

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 inthe year 1949.

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MEANING & DEFINITION

The central bank of India, which was established on

April 1, 1935, under the Reserve Bank of India Act.

The RBI uses monetary policy to create financial

stability in India and is charged with regulating the

country's currency and credit systems.

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FUNCTION OF RBI

The Reserve Bank of India is the central bank of

India it was established as a shareholders bank

on 1st April 1935. Its share capital was Rs. 5

crore, divided in to 5 lakhs fully paid up shares of

Rs. 100 each. On 1st January 1949 it was

nationalized. Its headquarters is at Mumbai. RBI,

like any other bank performs almost all traditional

Central banking functions. Due to countrys

development it has also undertaken

developmental and promotional functions.

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ROLE & FUNCTION OF RBI

Issue Of Currency Notes

Banker To The Government

Bankers bank And Lender Off Last Resort

Controller Of Credit

Exchange control And Custodian Of Foreign Reserve

Collection And Publication Of Data

Regulatory And Supervisory Functions Clearing House Functions

Development And Promotional Functions

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MONETARY POLICY Monetary policy is a regulatory policy by which the

central bank or monetary authority of a countrycontrols the supply of money, availability of bankcredit and cost of money, that is, the rate of Interest.

An important tool of economic management in India.

RBI controls the supply of money and bank credit.

RBI rightly calls its credit policy as one of controlledexpansion.

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OBJECTIVES OF MONETARY POLICY

Growth With Stability

Regulation, Supervision And Development Of Financial

Stability

Promoting Priority Sector

Generation Of Employment

External Stability

Encouraging Savings And Investments Redistribution Of income And Wealth

Regulation Of NBFIs

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MONETARY POLICY OF RBI FOR

CONTROL OF CREDIT

QUANTITATIVE CREDIT CONTROL METHODS

Bank Rate Policy

Open market operations Cash Reserve Ratio

Statutory Liquidity Ratio

Repo And Reverse Repo Rates

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QUALITATIVE CREDIT CONTROL

METHODS

Ceiling On Credit

Margin Requirements

Discriminatory Interest Rate Directives

Direct Action

Moral Suasion

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ACHIEVEMENT & FAILURES

ACHEIVEMENTS

Short Term Liquidity Management

Financial Stability

Adaptability Increase In Growth

Increase In Bank Deposits

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FAILURES

Huge Budgetary Deficits

Coverage Of Only Commercial Banks

Problem Of Management Of Banks And Financial

Institutions Black Money

Lack Of Transparency

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CONCLUSION

It can be said that despite several problems RBI

has made a good effort for effective

implementation of the monetary policy in India.

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