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Rupesh Roshan Singh, Lovely Professional University Unit 2: Reserve Bank of India

Unit 2: Reserve Bank of India Notes

CONTENTS
Objectives

Introduction

2.1 Organization of RBI
2.2 Objectives of RBI
2.3 Reserve Bank and Industrial Finance

2.4 Nature and Functions of Central Bank

2.4.1 Traditional Central Banking Functions (monetary functions)
2.4.2 Supervisory Functions (Non-monetary Functions)
2.4.3 Promotional Functions (Non-monetary Functions)

2.4.4 Miscellaneous Functions

2.5 Risk Management and Central Bank
2.6 Summary
2. 7 Keywords

2.8 Review Questions

2.9 Further Readings
Objectives

After studying this unit, you should be able to:
Determine detailed discussion on Reserve Bank of India (RBI)
Understand the departments and objectives of RBI

Understand the differences between central bank and other banks
Identify selective credit control concept
Describe nature, functions and risk management of central bank

Introduction

A central bank, reserve bank, or monetary authority, is an entity responsible for the monetary
policy of its country. Its primary responsibility is to maintain the stability of the national
currency and money supply, but more active duties include controlling subsidized-loan interest
rates, and acting as a “bailout” lender of last resort to the banking sector during times of
financial crisis. It may also have supervisory powers, to ensure that banks and other financial
institutions do not behave recklessly or fraudulently.

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