For RBI Grade B Exam Interview
Full Service Central Bank
❖ Currency Management
❖ Monetary Policy
❖ Debt Management for the Government
❖ Banker to Banks and the Government
❖ Financial Regulation and Supervision
❖ Foreign Exchange Reserve Management
❖ Foreign Exchange Management
❖ Market Operations
❖ Payment and Settlement Systems
❖ Developmental Role
❖ Policy Research and Data Dissemination
Core Functions
Monetary Policy
❖ One of the most important and core functions of central banks is formulation and execution of monetary policy.
❖ The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the RBI Act, 1934.
❖ The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
❖ Monetary Policy Committee to target inflation.
❖ Department: Monetary Policy Department
Currency Management
❖ Issue of Currency – Notes and Coins.
❖ Along with the Govt., RBI is responsible for the design, production and overall management of the nation’s currency, and ensuring an adequate supply of clean and genuine notes.
❖ The Govt is the issuing authority of coins and supplies coins to the Reserve Bank on demand.
❖ Departments:
• Department of Currency Management
• Issue Departments (ROs)
Government Business
Banker to the Government
❖ Since its inception, the Reserve Bank of India has undertaken the traditional central banking function of managing the government’s banking transactions.
❖ Central Government Business – Both an obligation and a right.
❖ State Government Business – By agreement - All, except Sikkim (State Bank of Sikkim)
❖ Departments:
• Department of Government and Bank Accounts
• Public Accounts Department (ROs)
Debt Manager
❖ Management of Public Debt - on behalf of the Central and the State Governments.
❖ Issue of new loans, payment of interest and repayment of these loans.
❖ Departments:
• Internal Debt Management Department
• Public Debt Offices (ROs)
Banking/Financial Business
Banker to Banks
❖ Maintenance of CRR
❖ Settlement of inter-bank obligations in Central Bank books
❖ Lender of the Last Resort (LoLR) function
❖ Departments:
• Department of Government and Bank Accounts
• Deposit Accounts Department (ROs)
Financial Regulation and Supervision
❖ India’s financial system includes commercial banks, regional rural banks, local area banks, cooperative banks, payment banks, small finance banks, financial institutions and nonbanking financial companies.
❖ Traditionally, the Reserve Bank’s regulatory and supervisory policy initiatives are aimed at protection of the depositors’ interests, orderly development & conduct of banking operations, and liquidity and solvency of banks.
❖ Departments:
• Department of Regulation
• Department of Supervision
Foreign Exchange
Foreign Exchange Management
❖ The Reserve Bank oversees the foreign exchange market in India.
❖ FEMA 1999 - facilitating external trade and payments and promoting the orderly development of foreign exchange markets in India.
❖ Department: Foreign Exchange Department
Forex Reserve Management
❖ The Reserve Bank, as the custodian of the country’s foreign exchange reserves, is vested with the responsibility of managing their investment.
❖ Department: Department of External Investments and Operations
Markets and Payments
Markets
❖ Major market segments under the regulatory ambit of the Reserve Bank are -
Interest rate markets incl G Secs and money markets, foreign exchange markets and their derivatives including credit derivatives.
❖ Departments:
• Financial Markets Regulation Department
• Financial Markets Operations Department
Payment and Settlement Systems
❖ The regulation and supervision of payment systems is being increasingly recognized as a core responsibility of central banks.
❖ By overseeing payment and settlement systems, central banks help to maintain systemic stability and reduce systemic risk, and to maintain public confidence in payment and settlement systems.
❖ The PSS Act, 2007 and the PSS Regulations, 2008 - provide the statutory backing for the function.
❖ Department: Department of Payments and Settlement Systems
Development and Research
Developmental Role
❖ One of the few central banks that has taken an active and direct role in supporting developmental activities in their country.
• Ensuring credit to productive sectors of the economy,
• Creating institutions to build financial infrastructure, and
• Expanding access to affordable financial services.
❖ Department: Financial Inclusion and Development Department
Policy Research and Data Dissemination
❖ Policy-oriented research in the field of economics, finance and statistics
❖ Disseminating data and information
❖ Departments
• Department of Economic and Policy Research
• Department of Statistics and Information Management
Other Departments
❖ Financial Stability Unit
• Macro-prudential surveillance – Financial stability perspective
❖ Risk Monitoring Department
• Enterprise wide Risk Management – internal operational risk
❖ Inspection Department
• Internal Audit and assurance of internal working of the bank.
❖ International Department
• Focus on international financial diplomacy and participation in formulation of global regulatory standards
❖ Enforcement Department
• Policy and Action against all regulated entities
❖ Consumer Education and Protection Department
• Complaint redressal – RBI and regulated entities
Support Departments
❖ Human Resource Management Department
❖ Department of Information Technology
❖ Premises Department
❖ Rajbhasa Department
❖ Legal Department
❖ Secretary’s Department
❖ Department of Communication
❖ Corporate Strategy and Budget Department
These are some of the functions of RBI. To know more visit RBI Website:
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