Reserve Bank of India
India’s Central Bank
is known as the Reserve Bank of India
and currently resides in Mubai as opposed to its original home of Calcutta. The bank was established in 1935 and like most central banks its main focus is to maintain the monetary stability
The reserve bank is the official issuer of Rupee currency in India and is responsible for making available an adequate supply of good quality currency
to the public as well as taking in and destroying coins or notes that are not up to standards due to age or wear. The following are in frequent use: 10, 20, 50, 100, 500, 1000 rupee bank notes and 5, 10, 20, 25, 50 paise coins in a subdivision of 100.
In order to maintain its objective of price stability and adequate credit flow the bank uses monetary policy, more specifically Bank Rate, Repo Rate/Reverse Repo Rate and a Cash Reserve Ratio. For years they have generally been trying to decrease the inflation rate.
It is the Reserve Bank of India’s responsibility to regulate and supervise the whole financial system of the country and maintain confidence in the system.
Their foreign exchange policy is to “facilitate external trade and payment and promote orderly development and maintenance of the foreign exchange market in India,” and they are governed by the Foreign Exchange Management Act, 1999. India has the 4th highest amount of foreign exchange reserves in the world, totaling around $297 Billion.
A lot of regulation in regards to domestic banks and finance companies is supervised by the Board for Financial Supervision. Their functions include:
• strengthening of the role of statutory auditors
• introduction of off-site surveillance
• strengthening of the internal defenses of supervised institutions.
• restructuring of the system of bank inspections
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