DEPARTMENTS OF RESERVE BANK OF INDIA

INTRODUCTION

The Reserve Bank of India is India's central banking institution, which controls
the monetary policy of the Indian rupee. It commenced its operations on 1 April
1935 during the British Rule in accordance with the provisions of The Reserve
Bank of India Act, 1934. The original share capital was divided into shares of 100
each fully paid, which were initially owned entirely by private
shareholders. Following India's independence on 15 August 1947, the RBI was
nationalised on 1 January 1949.

The RBI plays an important part in the Development Strategy of the Government
of India. It is a member bank of the Asian Clearing Union. The general
superintendence and direction of the RBI is entrusted with the 21-member Central
Board of Directors: the Governor, 4 Deputy Governors, 2 Finance
Ministry representatives, 10 government-nominated directors to represent
important elements from India's economy, and 4 directors to represent local boards
headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these local
boards consists of 5 members who represent regional interests, and the interests of
co-operative and indigenous banks.

The bank is also active in promoting financial inclusion policy and is a leading
member of the Alliance for Financial Inclusion (AFI).

The bank is often referred to by the name Mint Street.

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FUNCTIONS
Financial Supervision
The Reserve in November 1994 as a committee of the Central Board of Directors
of the Reserve Bank of India. Primary objective of BFS is to undertake
consolidated supervision of the financial sector comprising commercial banks,
financial institutions and non-banking finance companies.

The Board is constituted by co-opting four Directors from the Central Board as
members for a term of two years and is chaired by the Governor. The Deputy
Governors of the Reserve Bank are ex-officio members. One Deputy Governor,
usually, the Deputy Governor in charge of banking regulation and supervision, is
nominated as the Vice-Chairman of the Board. The Board is required to meet
normally once every month. It considers inspection reports and other supervisory
issues placed before it by the supervisory departments.

BFS through the Audit Sub-Committee also aims at upgrading the quality of the
statutory audit and internal audit functions in banks and financial institutions. The
audit sub-committee includes Deputy Governor as the chairman and two Directors
of the Central Board as members. The BFS oversees the functioning of Department
of Banking Supervision (DBS), Department of Non-Banking Supervision (DNBS)
and Financial Institutions Division (FID) and gives directions on the regulatory and
supervisory issues.

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Regulator and supervisor of the financial system

The institution is also the regulator and supervisor of the financial system and
prescribes broad parameters of banking operations within which the country's
banking and financial system functions. Its objectives are to maintain public
confidence in the system, protect depositors' interest and provide cost-effective
banking services to the public. The Banking Ombudsman Scheme has been
formulated by the Reserve Bank of India (RBI) for effective addressing of
complaints by bank customers. The RBI controls the monetary supply, monitors
economic indicators like the gross domestic product and has to decide the design of
the rupee banknotes as well as coins.

Managerial of exchange control

The central bank manages to reach different goals of the Foreign Exchange
Management Act, 1999. Objective: to facilitate external trade and payment and
promote orderly development and maintenance of foreign exchange market in
India

Issue of currency
The bank issues and exchanges currency notes and coins and destroys the same
when they are not fit for circulation. The objectives are to issue bank notes and

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giving public adequate supply of the same, to maintain the currency and credit
system of the country to utilize it in its best advantage, and to maintain the

reserves. RBI maintains the economic structure of the country so that it can
achieve the objective of price stability as well as economic development, because
both objectives are diverse in themselves. For printing of notes, the Security
Printing and Minting Corporation of India Limited (SPMCIL), a wholly owned
company of the Government of India, has set up printing presses at Nashik,
Maharashtra and Dewas, Madhya Pradesh. The Bharatiya Reserve Bank Note
Mudran Private Limited (BRBNMPL), a wholly owned subsidiary of the Reserve
Bank, also has set up printing presses at Mysuru in Karnataka and Salboni in West
Bengal. In all, there are four printing presses. And for minting of notes, SPMCIL
has four mints at Mumbai, Noida (UP), Kolkata and Hyderabad for coin
production. While coins are minted by GoI, the RBI works as an agent of GoI for
distributing and handling of coins. RBI also works to prevent counterfeiting of
currency by regularly upgrading security features of currency. For printing
currency, RBI has four facilities at Dewas, Nasik,Mysore and Salboni. The RBI is
authorized to issue notes up to value of Rupees ten thousand

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Banker's bank

Nagpur branch holds most of India's gold deposits

RBI also works as a central bank where commercial banks are account holders and
can deposit money. RBI maintains banking accounts of all scheduled
banks. Commercial banks create credit. It is the duty of the RBI to control the
credit through the CRR, bank rate and open market operations. As banker's bank,
the RBI facilitates the clearing of cheques between the commercial banks and
helps inter-bank transfer of funds. It can grant financial accommodation to
schedule banks. It acts as the lender of the last resort by providing emergency
advances to the banks. It supervises the functioning of the commercial banks and
take action against it if need arises. The RBI also advices the banks on various
matters for example Corporate Social Responsibility

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DEPARTMENT OF RESERVE BANK OF INDIA

Consumer Education and Protection Department

The Customer Service Department was renamed as Consumer Education and

Protection Department (CEPD) in November 2014 and acts as the single nodal
point for receipt and disposal of all external complaints on deficiency of services
provided by the Reserve Bank of India and the reserve Bank-regulated entities.
Apart from complaint redress, CEPD will also act as the nodal department for
enforcing ethical behaviour by the financial services providers under the regulatory
purview of the Reserve Bank. It will also create consumer awareness and educate
the public on banking and financial services.

Major Functions:

a. Dissemination of instructions/information relating to customer service and

grievance redress by banks and the Reserve Bank of India

b. Overseeing the grievance redress mechanism in respect of services rendered

by various offices/departments of the Reserve Bank

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c. Administering the Banking Ombudsman Scheme

d. Acting as a nodal department for the Banking Codes and Standards Board of
India (BCSBI)

e. Ensuring redress of complaints about deficiencies in customer service in

banks received directly and through CPGRAMS - Portal of Government of India.

f. Liaison between banks, Indian Banks Association, BCSBI, offices of

Banking Ombudsmen and regulatory departments of the Reserve Bank on matters
relating to customer services and grievance redress and providing policy inputs to
regulatory departments of the Reserve Bank, IBA and BCSBI in this regard.

g. Compile and publish Annual Report of the Banking Ombudsman Scheme,

2006

Corporate Strategy and Budget Department

This department mainly looks after:

Formulation of policy relating to Provident Fund, Actuarial Valuation,

investment of various staff welfare funds in government securities

Policy work relating to the Reserve Bank's budget, sanction of additional

budget, managing budget module in CBS, review and amendments of Expenditure
Rules

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Preparation of vision, mission and action statement of the Reserve Bank

Work related to opening of offices and organisations funded by the Reserve

Bank

Preparation of policy and broad guidelines for business continuity plan

Department of Banking Regulation

The Department of Banking Regulation exercises regulatory powers in respect of

commercial banks, Local Area Banks (LABs) and Regional Rural Banks (RRBs)
as per the provisions contained in the Banking Regulation Act, 1949, the Reserve
Bank of India Act, 1934, the Regional Rural Banks Act, 1975 and other related
statutes.

In particular, it looks after

licensing, branch expansion and maintenance of statutory reserves,

management and methods of operations, amalgamation, reconstruction and
liquidation of banking companies.

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regulatory oversight of select All India Financial institutions, such as, Exim
Bank, Industrial Investment Bank of India (IIBI), National Bank for Agriculture
and Rural Development (NABARD), National Housing Bank (NHB) and Small
Industries Development Bank of India (SIDBI) and administration of the Credit
Information (Regulation) Act, 2005 and regulation of credit information
companies.

approval for setting up of subsidiaries and undertaking of new activities by

commercial banks as also the regulatory functions relating to financial institutions
(FIs).

promoting and fostering a sound, multi-faceted and competitive financial

system by laying down norms for prudential regulation of commercial banks/FIs.

creating pro-active environment for development of new products

keeping itself abreast of developments domestically and globally and

formulating policy responses by suggesting amendments to the existing
laws/enactment of new legislation, regulation, etc.

striving to bring the regulatory standards of commercial banks/FIs on par

with the international best practices.

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Department of Communication

The origin of the Department of Communication could be traced to the Division of

Publications and Press Relations in the then Economics Department way back in
1960s. Recognising the widening range of functions of the Reserve Bank and its
associate institutions and the need for effective publicity and public relations, the
office of the Press Relations Officer was converted into a full-fledged Press
Relations Section in the seventies. The Division was, in March 2007, given the
status of a full-fledged department and was renamed Department of
Communication (DoC).

Communication Policy

In 2008, the Reserve Bank of India for the first time, elaborated its communication
policy which was placed on the RBI website with the approval of the Reserve
Bank's Central Board of Directors.

Dissemination

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The varied publications of the Reserve Bank are the mainstay of the Reserve
Banks dissemination policy. Apart from the publications, speeches of the
Governor and Deputy Governors provide rationale and explanations behind the
policy decisions. Informal discussions with financial editors are also arranged
every two months to keep open an informal channel of communication between the
media and the Reserve Bank.

Dissemination of information in the Reserve Bank is centralised. The present

communication channels used by DoC for dissemination of information are:

a. Press releases, press summaries of reports and publications, speeches of

Governor/Deputy Governors and rejoinders;

b. Press conferences, economic editors conferences and media briefings;

c. Meetings/interviews of press persons with the Reserve Bank officials;

d. Emails;

e. Learning sessions for media

f. Brochures/pamphlets;

g. Website;

h. Advertisements;

i. Periodicals.

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Feedback

As a 360-degree communication process, the Reserve Bank actively seeks

feedback from stakeholders on regulations through its website. Department of
Communication also monitors reports appearing in the newspapers, journals and
news agencies and television and prepares a daily news summary of important
news items in national media.

Department of Co-operative Banking Regulation

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The Department of Co-operative Banking Regulation (DCBR) regulates State Co-

operative Banks (StCBs), District Central Co-operative Banks (DCCBs) and
Primary Cooperative Banks, popularly known as Urban Cooperative Banks
(UCBs).

UCBs are primarily registered as cooperative societies under the provisions of

either the State Cooperative Societies Act of the State concerned or the Multi State
Cooperative Societies Act, 2002. StCBs/DCCBs, which are part of short-term co-
operative credit structure, are registered under the provisions of State Cooperative
Societies Act of the State concerned. Since March 1, 1966 the banking laws were
applied to cooperatives societies. Since then there is duality of control over
StCBs/DCCBs/UCBs between the RCS/CRCS and the Reserve Bank of India.

The Reserve Bank thus regulates the banking functions of StCBs/DCCBs/UCBs

under the provisions of sections 22 and 23 of the Banking Regulation Act,
1949 (As Applicable to Cooperative Societies (AACS ); whereas RCS/CRCS looks
after incorporation, registration, management, recovery, audit, supersession of
Board of Directors and liquidation. DCBR functions in close coordination with
other regulators, namely, Registrar of Cooperative Societies (RCS) and Central
Registrar of Cooperative Societies (CRCS). In addition to regulatory functions, the
Department also carries out developmental functions for StCBs /DCCBs / UCBs.

Functions:

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To issue licence to UCBs/StCBs/DCCBs to carry on banking business

To grant approval to UCBs/StCBs for inclusion in the Second Schedule of

Reserve Bank Act, 1934

To authorise UCBs/StCBs to open branches. In terms of section 23 1(b) of

Banking Regulation Act, 1949 (AACS), DCCBs are exempted from the
requirement of obtaining licence from the Reserve Bank for opening
branches/places of business

To grant permission for extension of area of operations of UCBs

To prescribe prudential norms for sound functioning of UCBs/StCBs/DCCBs

To issue directions and operational instructions to StCBs/DCCBs/UCBs,

wherever necessary to streamline their functioning and to protect the interests of
the depositors4

To impose penalty under section 47 of the Banking Regulation Act, 1949

(AACS)

To prescribe various periodical returns to be submitted by StCBs/DCCBs/UCBs

To cancel the licence of an StCB/DCCB/UCB, if it does not fulfil any of the

conditions of licence

To impart training to the officials of UCBs/StCBs/DCCBs to upscale their

knowledge, skill and expertise as part of developmental functions

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The Reserve Bank has entered into memorandum of understanding (MOU) with
Central Government and various State Governments for harmonisation of
regulation and supervision.

Department of Co-operative Bank Supervision

Department of Co-operative Bank Supervision is entrusted with the task of

supervising Urban Co-operative Banks (UCBs) as per the Banking Regulation Act,
1949, Reserve Bank of India Act, 1934 and Reserve Bank of Indias prescribed
guidelines. With effect from March 1, 1966, UCBs have been brought under the
ambit of the provisions of the Banking Regulation Act, 1949 as the growing
presence of co-operatives in the system necessitated better and efficient
monitoring. However, co-operation being a state mandate, UCBs are also regulated
by Central Registrar of Co-operative Societies (CRCS)/Registrars of Co-operative
Societies (RCS). The areas that are handled by the State/Central Government
through the RCSs/CRCS are registration, management, administration, recovery,
audit, supersession of Board of Directors and liquidation of UCBs.

The Reserve Bank of India prescribes prudential norms for capital adequacy,
income recognition, asset classification and provisioning, loans and advances,
investments and liquidity requirements. Further, guidelines have also been given to
UCBs in respect of single/group exposure norms and sectoral exposures. UCBs are
required, by virtue of the provisions of section 35 A of the Banking Regulation Act,
1949 (As Applicable to Co-operative Societies), to comply with these directions.

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DCBS is broadly given the mandate of on-site and off-site supervision through its
various Regional Offices. They monitor compliance of UCBs with the
guidelines/directives issued by the Reserve Bank. The on-site supervision is carried

out by way of inspections conducted under section 35 of the Banking Regulation

Act, 1949 (AACS). Inspection report of each inspected bank is generated and
depending on the findings, compliance is called for from the bank to rectify the
violation/irregularity observed. The findings of the inspections are presented to
various committees/boards, such as, Board for Financial Supervision at central
level and Local Boards, National Federation of Urban Co-operative Banks
(NAFCUB) at local level.

UCBs file a set of statutory/other returns with the Reserve Bank through a
dedicated software package, Off-site Surveillance System. These returns help the
Reserve Bank in off-site monitoring of the financial position of banks.

Based on the current assessment of the financial position of a UCB, the department
initiates supervisory actions, if need be, by advising the individual UCB of the
specific action under Supervisory Action Framework proposed to be taken and the
corrective action it needs to take to improve the financial position.

The Reserve Bank also issues directions and operational instructions to UCBs,
wherever necessary to streamline the functioning of these banks and to protect the
interests of the depositors. Powers have also been vested with the Reserve Bank
under section 47 of the Banking Regulation Act, 1949 for imposition of penalty.

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Apart from supervisory functions, the department also processes applications

received from UCBs, in co-ordination with other departments of the Reserve Bank,
for extension of various facilities, such as, conducting foreign exchange business

by obtaining AD Category I licence from the Reserve Bank, mobile banking,

internet banking, opening of currency chest, etc.

The Reserve Bank has also entered into Memorandum of Understanding with State
Governments, Union Territories and Central Government (for multi-state UCBs) to
set up a Task Force on Urban Co-operative Banks (TAFCUB) in each State/UT to
identify and draw up a time-bound action plan for the revival of potentially viable
UCBs and non-disruptive exit for non-viable UCBs.

The Regional Offices of the Reserve Bank act as focal points for monitoring
upgradation of skill for the staff of co-operative banks, improvements in their
training programmes and linking and integrating them with the country's banking
system.

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Department of Corporate Services

Created as part of institutional reorganisation undertaken in November 2014, the

focus of Department of Corporate Services will be on coordinating and facilitating
delivery of certain internal corporate services so that specialised departments can
focus on their core functions. It will, thus, look after:

Protocol Services to top management

Coordinating management of events, seminars, meetings and providing

hospitality to visiting dignitaries

Providing other support services, such as, framing guidelines for award of
contracts/floatation of tenders for printing, pricing, sales and distribution of
publications and centralised procurement/arrangement of various stationery items,
courier services, etc.

Coordinating with Department of Information Technology, Human

Resources Management Department and other user departments for Electronic

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Documentation Management System of the Reserve Bank including framing

guidelines for preservation of documents.

Department of Economic and Policy Research

The Department of Economic and Policy Research undertakes policy

supportive research under a structured research agenda on macroeconomic issues
specifically in the areas of monetary policy, financial markets, forecasting of
macroeconomic variables, financial stability, and external sector management.

The primary statistics on monetary aggregates, balance of payments and

external debt, flow-of-funds, financial savings and state finances are compiled in
the Department, which are disseminated by the Reserve Bank through print and
electronic media.

The Department is responsible for publishing the statutory Annual Report of

the Reserve Bank. The History of the Reserve Bank is also published by the
Department. Other regular publications of the Reserve Bank brought out by the

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Department include State Finances: A Study of Budgets of State Governments,

RBI Monthly Bulletin and Weekly Statistical Supplement.

The Department supports and encourages research environment in the

country through its Research Chairs, Fellowships and sponsoring of research
projects and studies.

It also organises two lectures in the memory of two of its past Governors,
namely, Shri C.D. Deshmukh and Shri L.K. Jha.

Department of External Investments and Operations

Functions

Investment and management of the foreign currency and gold assets of the
Reserve Bank of India,

Handling external transactions on behalf of Government of India (GOI)

including transactions relating to International Monetary Fund (IMF)

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All policy matters incidental to India's membership of the Asian Clearing

Union, and

Other matters relating to gold policy, membership of the Bank for

International Settlements (BIS) and bilateral banking arrangements between India
and other countries like Russia, bilateral and South Asian Association for Regional
Cooperation(SAARC) currency swap arrangements

Department of Government and Bank Accounts

The Department of Government and Bank Accounts (DGBA) discharges the core
central banking function of acting as banker to the government and banker to
banks.

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More specifically, it:

maintains principal deposit accounts of Central and State Governments at

Central Accounts Section of the Reserve Bank of India, Nagpur

grants ways and means advances to Central and State Governments

Carries out day to day operations by agency bank branches (authorised for
this purpose) and Banking Departments at Regional Offices.

frames the accounting policy of the Reserve Bank

finalises the weekly statement of accounts of the Issue and Banking

Departments and the annual balance sheet of the Reserve Bank

attends to matters relating to government business, such as appointment of

agency banks, paying them commission and overseeing their conducting of
government business. Much of this is done in consultation with the government

In its capacity as banker to banks, the Reserve Bank:

opens current accounts of banks with itself, enabling them to maintain

statutorily prescribed cash reserves as well as to carry out inter-bank transactions

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effects interbank clearing settlements through these current account. The

Department of Government and Bank Accounts (DGBA) also functions as the
central office of the Banking Departments at Regional Offices.

Department of Non-Banking Regulation (DNBR)

Department of Non-Banking Regulation (DNBR) works towards promoting and

fostering a robust and sound non-banking financial sector by laying down
appropriate regulations including prudential regulations and business conduct
regulations for Non-Banking Financial Companies (NBFCs) (including Mortgage
Guarantee Companies(MGCs) and Securitisation Companies and Reconstruction
Companies (SC/RCs).

Functions:

a. To frame policies for regulation and supervision of NBFCs (including

(MGCs) and SC/RCs,

b. Issuance and cancellation, if required, of Certificate of Registration (CoR) to

NBFCs (including (MGCs) and SC/RCs),

c. Consultation and co-ordination with other departments of the Reserve Bank,

other finance sector regulators, industry and various other stakeholders including
Centre and State Governments in policy and other related matters,

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d. Administration of the provisions of the Reserve Bank of India Act, 1934

relating to NBFCs, Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002,

e. Advising State Governments, as and when required, on rules to be notified

under Chit Funds Act, 1982, the Prize Chit and Money Circulation Schemes
(Banning) Act, 1978 and on issues related to the functions discharged by DNBR.

Department of Non-Banking Supervision (DNBS)

The Department of Non-Banking Supervision (DNBS) is entrusted with the

responsibility of supervision of Non-Banking Financial Companies (NBFCs) under
the provisions contained under Chapter III B and C and Chapter V of the Reserve
Bank of India Act, 1934main focus of the department is on a) depositor protection,
b) consumer protection and c) financial stability. The supervisory framework of the
Reserve Bank provides for surveillance of the sector through off-site monitoring
and on-site inspection.

Functions:

1. To ensure compliance with the provisions of the Reserve Bank of India Act,
1934 relating to NBFCs, Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 and Factoring Regulation Act, 2011.

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2. To supervise regulated entities through on-site inspections and off-site

monitoring.

3. To ensure adherence by NBFCs to the policies laid down by the Department

of Non-Banking Regulation (DNBR) with the help of the respective Regional
Offices (ROs).

4. To act as a secretariat to the State Level Coordination Committee (SLCC)

and to ensure better inter regulatory co-ordination through the SLCC mechanism to
curb unauthorised non-banking financial activities.

5. To conduct public awareness programmes, depositors' education and to

conduct workshops / seminars for trade and industry organisations.

Department of Payment and Settlement Systems

Functions

The Department of Payment and Settlement Systems (DPSS), as a separate

department of the Reserve Bank, came into existence in March 2005.

The functions of the Department include:

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Policy formulation in respect of payment and settlement systems

Authorisation of payment and settlement systems/operators

Regulation of payment and settlement systems

Supervision and monitoring of payment and settlement systems

Laying down standards for payment and settlement systems

Designing, developing and integrating payment system projects of national

importance and / or facilitating such implementation

Implementation of the international principles relating to payment systems

as enunciated by the Bank for International Settlements

The department has four Regional Offices at Chennai, Kolkata, Mumbai and New
Delhi.

Board for Regulation and Supervision of Payment and Settlement

Systems

The Board for Regulation and Supervision of Payment and Settlement Systems
(BPSS) prescribes policies relating to the regulation and supervision of all types of
payment and settlement systems. The BPSS also provides guidance on setting

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standards for existing as well as future payment systems, authorising the payment
and settlement systems/operators, determine criteria for membership to these
systems, including continuation, termination and rejection of membership. BPSS
meets once every quarter.

The payment and settlement systems in India are regulated under the
Payment and Settlement Systems Act, 2007 (PSS Act). The PSS Act as well as the
Payment and Settlement System Regulations, 2008 framed under the Act came into
effect from August 12, 2008. In terms of the PSS -Act, no person other than the
Reserve Bank

of India (RBI) can commence or operate a payment system in India unless

authorised by the Reserve Bank.

Payment and settlement systems in India includes cheque based clearing

systems, Electronic Clearing Service (ECS) suite, National Electronic Funds
Transfer (NEFT) System, electronic payments using debit and credit cards, prepaid
payment instruments, mobile banking, internet banking, etc. While Real Time
Gross Settlement Systems (RTGS) and Clearing Corporation of India Ltd. (CCIL)
constitute financial market infrastructure, National Payments Corporation of India
(NPCI) is the umbrella organisation for retail payments.

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Department of Statistics and information Management

Collection, processing and analysis of data on banking, corporate and

external sectors.

Planning, designing and organising quick sample surveys regularly for area
of interest to the Reserve Bank.

Maintaining the Reserve Banks Data Warehouse and disseminating

data/information.

Modelling and forecasting of important macro-economic indicators.

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Development of methodology for the measurement and estimation of

variables and improvement of the database of various sectors of the economy
through participation in committees, working groups, etc.

Providing technical support to other departments of the Reserve Bank in

statistical analysis in specific areas and undertaking studies in the areas of interest
to the Reserve Bank.

Current Focus

Building a technology-driven centralised information management of

receipt, processing, production, storage and retrieval of data and its dissemination
system based on data warehousing approach. The system provides the decision-
makers, analysts and researchers, online and real-time access to a central repository
of clean and consistent historical and current data.

Standardisation in reporting of financial data under XBRL, which is being

integrated with the data warehouse, and is envisaged to be the only platform for
receiving and validating the incoming data in due course.

Developing a statistical system for maintaining data quality.

Bringing out Reserve Banks data publications directly from the data
warehouse.

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Undertaking forward-looking surveys on macroeconomic changes and

expectations for monetary policy formulation. Conducting other periodic surveys
to fill data gaps on relevant indicators, e.g., housing, employment placement for
fresh graduates, etc.

Improving the coverage of studies relating to finances of private corporate

sector of the economy.

Generation of forecasts of macroeconomic variables and related empirical

work, including developing a quarterly macro-econometric model for forecasts and
policy simulation.

Financial Inclusion and Development Department

Financial inclusion and development role of the Reserve Bank envisages

formulating policies to make credit available to productive sectors of the economy
including rural and Micro, Small and Medium Enterprises (MSME) sectors.
Promoting financial education and financial literacy are the current focus of the
function and encapsulates the renewed national focus on Financial Inclusion. The
functions of the Department in brief are:

To formulate macro policy to strengthen credit flow to the priority sectors

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To ensure that priority sector lending becomes a tool for banks to capture
untapped business opportunities among financially excluded sections of the society

To help expand Prime Ministers Jan Dhan Yojana (PMJDY) and to make it
a sustainable and scalable financial inclusion initiative through financial literacy

To step up credit flow to MSME sector and to rehabilitate sick units through
timely credit support

To strengthen institutional arrangement, such as, state level bankers

committee and Lead Bank Scheme to facilitate these objectives

Financial Markets Operation Department

Carved out of the Financial Markets Department in November 2014, the Financial
Markets Operation Department (FMOD) has been entrusted with the responsibility
of carrying out market operations towards implementing the Reserve Banks
monetary policy objectives. The Department, on behalf of the Reserve Bank,
conducts operations in the money, government securities and forex markets. As a
part of this responsibility, the FMOD also undertakes analysis of various market
segments and provides inputs to the top management for informed decision
making.
The specific functions of FMOD include:

Domestic forex market operations (Spot, Forwards and Swaps)

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Liquidity Adjustment Facility (LAF) operations (Repo, Reverse repo,

Marginal Standing Facility) including Open Market Operations (Outright
sale/purchase of gilts) under liquidity management framework revised in August
2014

Special Market Operations (SMO) for specific purposes

Computation and dissemination of the Reserve Bank's Rupee Reference

Rate

Computation of Nominal Effective Exchange Rate (NEER) and Real

Effective Exchange Rate (REER)

Issuance and buyback of dated securities under Market Stabilisation Scheme

(MSS)

Analysis of market developments

Carrying out market oriented research and analysis

Estimation of liquidity requirement in the banking system

Providing secretarial assistance to the Financial Markets Committee (FMC)

of the Reserve Bank

Coordinating meetings of Early Warning Group (EWG) comprising financial

sector regulators and Ministry of Finance

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In addition, the FMOD also attends to policy issues relating to various segments of
financial markets, fixation of Intra-Day Limits (IDL) limits for operation of Real
Time Gross Settlement Accounts and attending to references received from other
departments of the Reserve Bank, international and other regulatory organisations.

Financial Markets Regulation Department

The Financial Markets Regulation Department (FMRD) has been set up on

November 3, 2014 with a mandate to regulate, develop and oversee financial
markets. The primary activities of the department include:

Regulation and development of the

money, government securities, foreign exchange markets and related derivative

markets;

Regulation and supervision of financial benchmarks for interest rates and

foreign exchange markets;

Development work related to financial market infrastructure for the money,

government securities, foreign exchange markets and related derivative markets,
including trade repository for over-the-counter(OTC) derivative transactions;

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Oversight / surveillance of the money, government securities, foreign

exchange markets and related derivative markets; and

Secretarial support to the Technical Advisory Committee on Money,

Government Securities and Foreign Exchange Markets and RBI-SEBI Technical
Committee on Interest Rate and Currency Futures.

In addition, a Market Intelligence Cell is proposed to be set up as part of FMRD.

Financial Stability Unit

Keeping in view both international and domestic initiatives for resolving financial
crisis and strengthening international financial architecture, the Financial Stability
Unit (FSU) was set up in July 2009. The main functions of FSU are:

Conduct of macro-prudential surveillance of the financial system on an

ongoing basis

Preparation of financial stability reports

Development of a database of key variables which could impact financial

stability, in co-ordination with the supervisory wings of the Reserve Bank

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Development of a time series of a core set of financial indicators

Conduct of systemic stress tests to assess resilience and

Development of models for assessing financial stability

Following the formation of the Financial Stability and Development Council

(FSDC), FSU provides the Secretariat to the Sub-Committee of the FSDC which is
headed by the Governor. Executive Director (in charge of FSU) acts as the
Member-Secretary of the FSDC Sub-Committee.

Foreign Exchange Department

The Foreign Exchange Regulation Act, 1973 (FERA) was repealed and a new Act
called the Foreign Exchange Management Act, 1999 (FEMA) came into force with
effect from June 1, 2000. The objective of the new dispensation is to facilitate
external trade and payments and promote orderly development and smooth conduct
of foreign exchange market in India.

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Facilitator of Forex Transactions

Since the procedures have been simplified and powers have been delegated to the
Authorised Persons under the FEMA, 1999, the role of the Foreign Exchange
Department is minimum so far as individual citizens are concerned. Persons
resident in India have to simply approach the Authorised Persons for their foreign
exchange needs. Guided by the Current Account Rules notified, from time to time
by the Government of India and Capital Account Regulations notified by the
Reserve Bank, the Authorised Persons will facilitate foreign exchange transactions
of individuals. The Reserve Bank processes only those applications which require
its prior approval under Foreign Exchange Management (Current Account
Transactions) Rules and (Capital Account Transactions) Regulations.

Compounding of FEMA Contraventions

In keeping with the spirit of the FEMA, the Government of India has empowered
the Reserve Bank under section 15 of the Act to compound the contraventions of
all sections of FEMA, 1999 except section 3(a) of the Act. Under compounding the

contravener has the option of voluntarily admitting to the contravention, pleading

guilty and seeking redressal. The process provides comfort to individuals and
corporates that have inadvertently contravened FEMA while taking serious view of
wilful, mala fide and fraudulent transactions.

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Human Resource Management Department

Human Resource Management Department (HRMD) essentially facilitates the

Reserve Bank's central banking activities by (i) creating an enabling environment
to enhance the efficiency of the organisation (ii) drawing out from the staff the
very best by a system of proper placements, incentives, and (iii) creating an
atmosphere of trust, a certain security of expectations and a feeling that the
organisation cares about the well being and personal aspirations of the staff. This
helps align personal aspirations of the staff with professional goals and helps
enhance efficiency in the organisation.

Specifically, the functions of HRMD are:

a) To evolve and implement policies for:

i. Recruitment

ii. Placement

iii. Promotions and career progression

iv. Performance and potentiality appraisal

v. Training, development and skill upgradation

vi. Mobility (Transfers and Rotation)

vii. Reward and motivation

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viii. Retirement/voluntary vacations

ix. Wage structure and other facilities

x. Deputation/Secondment/Tour of duty

b) To generally administer discipline management system in the Reserve Bank

c) To disseminate information under the Right to Information Act, 2005 with a
view to promoting transparency and accountability in the Reserve Bank's
operations
d) To maintain up-to-date database on human resources in the Reserve Bank
e) To maintain harmonious industrial relations and to conduct negotiations with
various recognised bodies of different categories of staff on matters like pay scales
and allowances, welfare schemes, personnel policies, etc.
f) To continuously review the appraisal system in order to make it an effective tool
for HRD policy management
g) To design career and succession plan
h) To oversee the Reserve Banks training establishments (namely, Reserve Bank
Staff College, Chennai and College of Agricultural Banking, Pune besides Zonal
Training Centres at Chennai, Kolkata, Mumbai and New Delhi) and revitalise
training functions
i) To administer Staff Suggestion Scheme
j) To oversee Summer Placement
k) To publish the Reserve Bank's house journal WITHOUT RESERVE and to
conduct RBI Quiz.

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l) To act as Secretariat to Human Resource Management Sub-Committee of the

Central Board.
m) To oversee matters pertaining to Prevention of Sexual Harassment of women at
work place including secretarial assistance to Central Complaints Committee.

Inspection Department

Inspection Department was set up in 1935 when the Reserve Bank of India
commenced its operations. The Department is tasked with the mandate of
providing an independent and objective assurance/feedback on the
operations/working of the offices of the Reserve Bank. It examines/evaluates and
reports on the adequacy and reliability of the Reserve Bank's risk management,
internal controls and governance process.

The Inspection Department is the Secretariat and also reports its assessments to the
Audit and Risk Management Sub-Committee (ARMS) of the Central Board of the
Reserve Bank. Additionally, it places the findings of Information Systems (IS)
audits before the Information Technology Sub Committee (ITSC) of the Board.
Audit observations which have been classified as High Risk are also placed before
the Executive Directors Committee (EDC) for their review and guidance. The
Internal Audit function constitutes a key dimension in the Reserve Bank's
governance architecture.

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Streams of Inspection in the Reserve Bank

Presently, the following types of inspections are carried out/co-ordinated by the

Department.

Risk Based Internal Audit (RBIA)

Information Systems Audit

Concurrent Audit (CA)

Control Self-Assessment Audit (CSAA)

Risk Based Internal Audit (RBIA)

Under the Risk Based Internal Audit (RBIA), the Inspection Department provides
independent and objective opinion to the management on whether or not the
Reserve Bank's business processes and risks are being properly managed. The
RBIA reviews the outcomes of all other audits. Audit of various business units
Central Office Departments (CODs), Regional Offices (ROs), Training
Establishments (TEs), Banking Ombudsman Offices (BO) and Associate
Institutions (AIs) are taken up at different periodicities ranging from 12 to 24
months.

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Information System Audit (ISA)

Information Security (IS) audit is carried out as part of the RBIA framework to
evaluate risk control measures in Information Systems used in the Reserve Bank.
The Department also carries out technology audit of computer
applications/systems, technology platforms, services, etc. These are carried out
either at the directions of Central Board/Audit and Risk Management Sub-
Committee (ARMS)/Information Technology Sub-Committee (ITSC)/Top
Management or on receipt of request from the Business Owner Departments/User
Departments/Department of Information Technology (DIT) or as felt necessary by
the Department considering the criticality/importance of operations/systems.

Concurrent Audit (CA)

As a part of internal control mechanism, all the business units are required to get
their transactions (mainly financial transactions) audited by external chartered
accountant firms, concurrently with the occurrence of such transactions.

Control Self-Assessment Audit (CSAA)

This is a self-assessment/health check-up exercise to assess gaps in risk controls so

that timely reviews are made and corrective action taken/initiated to address the

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gaps. The assessments are carried out by persons unconnected with the
operations/process being assessed. All business units are required to conduct

CSAA at least twice in a year, that is, for the half-year ended June and December
every year.

Compliance, Follow-up and Reporting

Inspection Department follows up on the audit observations (RBIA, ISA/ TA, CA,
CSAA) to ensure that prompt corrective actions or risk mitigating counter-
measures are instituted. The Department undertakes off-site monitoring as well as
on-site evaluation, wherever necessary. Off-site monitoring is undertaken by
obtaining periodical returns from business units, analysing them and initiating
follow-up as deemed appropriate.

ARMS & EDC Meetings

The Department co-ordinates and arranges periodical meetings of Audit & Risk
Management Sub Committee (ARMS) and Executive Directors' Committee (EDC).
The meetings of ARMS and EDs' Committee are conducted approximately once in
three months. On half yearly basis, the Department reports to Information
Technology Sub-Committee (ITSC) of the Board on Information Systems
(including Security) audits undertaken by the Department.

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Internal Debt Management Department

The main activities of the Internal Debt Management Department include:

Managing the Governments debt in a risk efficient and cost effective

manner;

Providing innovative and practical solutions for governments debt

management;

Building a robust institutional framework of primary dealers (PDs).

Specific functions of the Department include:

(i) Government Borrowing:

To manage market borrowing programmes of the Government of India (including

preparing an issuance calendar in consultation with the Government of India), all
State Governments and the Union Territory of Puducherry. The function involves
choosing the instrument and tenor, manage the auctioning process and monitoring
State and Central cash balances.

(ii) Dealing Operations:

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To interface with the Government securities market for purchasing securities from
the secondary market for investment purposes by State Governments under
schemes like CSF & GRF and on behalf of foreign central banks. It also monitors
movement of yields of Government securities, among other things, and provides
necessary feedback to Top Management. It carries out monthly and quarterly
analysis of the Government Securities - Secondary market.

(iii) Primary Dealers:

To enter into agreements with PDs, monitor and review their performance with
regard to underwriting and bidding commitments in primary markets, conduct
underwriting auctions and supervise standalone PDs.

(iv) Research:

To provide policy, analytical and technical inputs for various committees and
conferences including State Finance Secretaries conference. To also act as the focal
point for answering parliamentary questions, queries of the Central Board and
Committee of Central Board of the Reserve Bank, research contributions to the
Reserve Banks, Government of Indias and other publications.

(v) Management Information Systems (MIS):

To monitor the data pertaining to Government cash balances, maintains the MIS
for the Top Management, provide data for various statutory and internal

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publications, oversee the technology platform for Government securities auction

activities and undertake analysis. Also to undertake the assessment and short term
projections of Government cash balances primarily for liquidity management
purposes of the Reserve Bank.

(vi) Central Debt:

To maintain accounting/reporting of public debt management functions. These

include formulation of policy and monitoring of Public Debt Offices, which act as
depositories of Government securities, as also to maintain and service public debt,
administration of Government Securities Act, 2006/Rules 2007 and also Public
Debt Act, 1944/ Rules 1947 wherever applicable.

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International Department

International Department was constituted in the Reserve Bank on November 3,

2014 to augment the focus on international financial diplomacy and participation in
formulation of global regulatory standards. The Department is responsible for
participation in international fora and for supporting the top Managements
interactions in this area, as also to facilitate their involvement of the institution in
international economic cooperation. It has a research orientation towards framing
the Reserve Banks stance on issues in this sphere. The Department is also
responsible for the Reserve Banks external services and relations including on
matters of technical cooperation with other central banks.

This department mainly looks after:

The Reserve Banks relations with international institutions/country

groupings, such as, International Monetary Fund(IMF), Bank for International

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Settlements(BIS), Financial Stability Board(FSB), G20, Brazil, Russia, India,

China and South Africa (BRICS), South Asian Association for Regional
Cooperation Finance(SAARCFINANCE), Committee on Payments and Market
Infrastructures (CPMI), Committee on the Global Financial System(CGFS), World
Bank, World Trade Organization(WTO), Asian Development Bank (ADB), etc.

Framing the Reserve Banks views on issues of policy relevance in

international economic cooperation, including those on regulatory issues and
central bank currency swaps, etc.

The Reserve Banks initiatives at capacity building for officials of other

central banks and managing exposure visits for delegates of foreign
institutions/market participants/universities, etc.

Preparing research notes on current issues in international economic

cooperation.

Legal Department

The primary responsibilities of the Legal Department are:

a. Providing legal advice to the top management, departments, regional offices

and subsidiaries of the Reserve Bank.

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b. Managing litigation on behalf of the Reserve Bank and the Deposit

Insurance and Credit Guarantee Corporation (DICGC).

c. Vetting of circulars, directions, regulations and agreements for the various

departments of the Reserve Bank. Assisting drafting of legislation to be
administered by the Reserve Bank.

d. Acting as a Secretariat to the First Appellate Authority of the Reserve Bank

under the Right to Information Act, 2005.

e. Appearing on behalf of the Reserve Bank before the Central Information

Commission and various judicial forums, such as, District Consumer Disputes
Redressal Forum, State Consumer Disputes Redressal Commission, Labour
Courts/Industrial Tribunals, etc.

Monetary Policy Department

Functions

Mandate and Objectives

According to the Reserve Bank of India Act, 1934, ...it is expedient to constitute a
Reserve Bank of India to regulate the issue of Bank notes and the keeping of
reserves with a view to securing monetary stability in India and generally to
operate the currency and credit system of the country to its advantage".

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The broad objectives of monetary policy are derived from the Reserve Bank
of India Act. The agreement on Monetary Policy Framework between the
Government and the Reserve Bank of India dated February 20, 2015 states that
the objective of monetary policy is to primarily maintain price stability, while
keeping in mind the objective of growth. The relative emphasis placed on price
stability and economic growth is modulated according to the circumstances
prevailing at a particular point in time and is spelt out, from time to time, in the
policy statements of the Reserve Bank. In the recent period, considerations of
financial stability have assumed an added importance in view of increasing
openness of the Indian economy.

The agreement on Monetary Policy Framework also specifies explicitly the

target for inflation as measured by the consumer price index-combined (CPI-C)
in the near to medium-term, i.e., (a) below 6 per cent by January 2016, and (b) 4
per cent (+/-) 2 per cent for the financial year 2016-17 and all subsequent years.

As per the agreement, the Governor, and in his absence the Deputy Governor
in charge of monetary policy, shall determine the policy rate, as well as any other
monetary measures, to achieve the inflation target.

The Reserve Bank has multiple instruments at its command for

implementation of monetary policy such as the repo rate; cash reserve ratio (CRR);
open market operations, including outright purchase/ sale and repos/ reverse repos
(both overnight as well as term); market stabilisation scheme (MSS); special
market operations; sector-specific liquidity facilities; and prudential tools.

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Main Functions

Monetary Policy Department is entrusted with the responsibility of assisting

the Governor, and in his absence the Deputy Governor in charge of monetary
policy, in designing, formulating and implementing monetary policy of the Reserve
Bank. Accordingly, the Department prepares Governor's Statements on Monetary
Policy.

The policy statements are bi-monthly since April 1, 2014, i.e., six times in a
year. Off-cycle monetary policy actions can also be undertaken depending on the
evolving macro-financial conditions.

Monetary policy formulation is carried out by the Reserve Bank in

consultation with various stakeholders, such as, banks, market participants and
industry and trade associations.

Main Activities

Prepares the bi-annual Monetary Policy Report.

Organises meetings of the Technical Advisory Committee on Monetary

Policy. In pursuance of the objective of further strengthening the consultative
process of monetary policy formulation, a Technical Advisory Committee (TAC)
on Monetary Policy has been set up to review macroeconomic and monetary
developments and advise the Reserve Bank on the stance of monetary policy.

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Conducts pre-policy consultation meetings with the bankers, market

participants, trade bodies, self-regulatory organisations, economists and journalists
to facilitate the policy formulation process.

Coordinates with other Departments of the Reserve Bank for Part-B of

Monetary Policy Statement covering developmental and regulatory policies.

Compiles data on interest rates and sectoral deployment of credit for

monitoring monetary policy transmission and assessing the pattern of credit flows,
respectively.

Prepares growth and inflation projections for presentation in the inter-

departmental groups and also in the pre-policy monetary policy strategy meetings.

Prepares forward looking assessment of liquidity conditions in consultation

with other Departments.

Undertakes analysis of global and domestic macroeconomic data. Monitors

relevant global developments, including monetary policy developments in major
economies.

Undertakes research on monetary policy related areas.

Monitors standing liquidity facilities/refinance schemes and proposes/

implements related policy changes.

Monitors and reviews maintenance of CRR and SLR by scheduled

commercial banks.

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Prepares a Memorandum for the Central Board of Directors twice a year

reviewing the monetary and credit developments and policy measures taken during
the period.

Premises Department

The Premises Department's responsibility is to create and maintain premises-

related infrastructure. The Department frames policies and guidelines on physical
infrastructure, acquisition, maintenance, consolidation and disposal of office and
residential space. It allocates capital budgets to Regional Offices and monitors
high- value works/projects of Estate Departments across the country, keeping in
mind ecological and environmental concerns.

The current thrust-areas of the Department are as follows:

Promoting greater environmental consciousness, conserving resources like energy

and water and auditing the use of these resources.
Rationalisation of Bank's properties.

Risk Monitoring Department

The Risk Monitoring Department (RMD) has been constituted for implementation
of Enterprise-wide Risk Management System in the Reserve Bank. The department

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has two divisions looking after operational risks and financial risks. For effective
identification, assessment and management of risks uniformly throughout the
Reserve Bank, RMD has been mandated:

To prepare a broad risk management framework and to formulate and to

periodically review the Reserve Banks policies/methodologies/matrices and to
interact with functional units to ensure that all significant risks are identified.

To aggregate, monitor and periodically report the risks reported by

functional units to the Risk Monitoring Committee (RMC) and Audit and Risk
Management Sub-Committee (ARMS).

To assess and report the financial risks arising out of the Reserve Banks
policy actions to the RMC and ARMS.

To create institutional memory by building a database of loss and near

loss events.

To periodically review the adequacy and appropriateness of the Reserve

Banks Business Continuity Plans (BCPs) and systems.

To foster risk management culture in the organisation.

Secretary's Department

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Secretarial work connected with the meetings of the Central Board and its
Committee;

Secretarial work relating to the Deputy Governors' Committee meetings.

Secretarial work relating to the Senior Management Committee (SMC)

meetings/sideline meetings of the Governor;

Monitoring implementation/follow up of decisions taken by these

committees;

Work relating to service conditions of the Governor and the Deputy

Governors, including their joining/retirement/relinquishing charge;

Work relating to constitution of Central Board/Local Board;

Providing administrative support, including IT related, to the top

management, including staff support and various non-establishment payments;

Providing administrative support and making non-establishment payments

on behalf of Secretary's Department, Internal Debt Management Department,
Financial Stability Unit, Financial Markets Regulation Department, Financial
Markets Operations Department, Department of Communication and Monetary
Policy Department (limited administrative support for this department);

Work relating to reservation of the VVIP Guest House;

Administrator to the Reserve Bank of India Employees' Provident Fund.

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