Economy: Reserve Bank of India
1) Establishment of RBI:
2) RBI's Preface:
“To regulate the issue of banknotes and to maintain reserves with a view to achieving monetary stability in India and for the country in general. To operate the currency and credit system in the best interest of India, to have a modern monetary policy framework to meet the challenges of a highly complex economy, to maintain price stability with the objective of growth in mind”
3) Central Board :
b) Non-official Director
Full-time: Governor and up to four deputy governors
Nominated by the government: ten directors and two government officials from different regions
Others: Four directors – one each from the four local boards
4) Major Functions:
5) Annual Report:
6) Report on Trend and Progress of Banking in India:
7) Autonomy of the Reserve Bank:
The Central Board of Directors shall have the powers of general superintendence and direction of the general affairs and business of the Bank, even in the absence of the Governor of the Reserve Bank and in his absence the Deputy Governor nominated by him under section 7(3). He will be able to exercise all the powers which are with the bank. However, there is no legal provision mandating the autonomy of RBI.
However, the RBI has always been viewed as an autonomous body, a composite body for all commercial banks – be it PSBs or private banks or foreign banks. It vests not only the powers to formulate monetary policy, but also the powers to oversee the working of all banks. For some time now, there has been a conflict between the Reserve Bank and the central government over the issue of autonomy of the central bank.
The main reasons for this are: RBI’s failure to check non-performing assets, the problem of lack of liquidity in the economy due to strict monetary policy, the corrective measures taken by the RBI to reform the banking system, which were not considered very positive by the government.