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Regulators in Financial System
RBI
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RBI was established on April 1935 as central bank of India,
It was nationalized on Jan 1949, The banks share capital is Rs. 5 cr. RBI regulate affairs of players in financial system under RBI Act 1934 and Banking Regulation Act 1949,
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Functions of RBI Note issuing authority, Government’s banker,
Banker's bank, Supervising authority, Regulator of money and credit
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Note issuing authority
Printing of currency notes are performed by ‘The Bhartiya Reserve Bank Note Mudran Private limited’ (BRBNMPL), This is a wholly owned subsidiary of RBI, Two printing press one at Mysore in Karnataka and another at Salboni in West Bengal, Both press have a combined capacity of 19.8 billion notes per year, As per Balance Sheet of RBI total 6,12,323 cr. Notes are in circulation,
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Government’s banker Maintain of current accounts of central and state government, Payment and collections, Lending to government under ‘Ways and Means Advance’ Advisor to government,
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Banker’s Bank Reserves with RBI in form of CRR and SLR,
Issuing of licenses, Controlling over banking affairs, Banker of last resort,
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Supervising Authority
RBI has a Board for Financial Supervision (BFS), This board supervise the affairs of commercial banks in public and private sector, NBFCs, Financial Institutions through CAMEL rating system, C= capital adequacy, A= asset quality, M= management, E= earning, L= liquidity, A banks health is evaluated on 1 to 5 rating where 1 refer as highest rating and 5 as lowest,
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Regulator of Money and Credit
RBI regulate supply of money and credit in economy through Monetary Policy, MP is prepared to pace up economic development and ensure price stability through controlled bank credit and money supply, RBI use different tools under MP, Bank rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Open Market Operation (OMO), liquidity Adjustment Facility (LAF), Repos/ Reverse Repos
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Financial Services …………..
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