CENTRAL BANKING

PRESENTATION BY S.DURGANANDA SWAMY

CENTRAL BANKING
COMMODITY MONEY---PRIOR TO 17TH CENTURY PROMISES TO PAY ACCEPTED AS MONEY 500 YEARS BEFORE ORIGIN OF BANKINGGOLDSMITHS BANCA (BENCH) BANK FIAT MONEY/SOVEREIGN MONEY BOE-1694-MODERN CONCEPT OF CENTRAL BANKING

CENTRAL BANK POLICY OBJECTIVES

TRADITIONALLY SINGLE OBJECTIVEPRICE STABILITY PURSUED BY BOE, ECB & BOJ

CENTRAL BANK POLICY OBJECTIVES

STABLE PRICES STABLE INTEREST RATES CREDIT FLOW &MAXIMUM EMPLOYMENT EXCHANGE RATE MGMT. FIN.STABILITY ASSUMED SIGNIFICANCE AFTER FIN.CRISES OF 1990s

WHAT IS FINANCIAL STABILITY?

ENSURING UNINTERRUPTED FIN.TRANSACTIONS MAINTENANCE OF A LEVEL OF CONFIDENCE IN THE SYSTEM AMONGST ALL PARTICIPANTS ABSENCE OF EXCESS VOLATILITY THAT AFFECTS ECO.ACTIVITY

RESERVE BANK OF INDIA

RESERVE BANK OF INDIA

APRIL 1, 1935 TO REGULATE THE ISSUE OF BANK NOTES AND KEEPING 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

MONETARY POLICY
TRANSMISSION OF POLICY

CHANNELSQUANTUM, INTEREST RATE, EXCHANGE RATE, ASSET PRICES NOT MUTUALLY EXCLUSIVE

PROCEDURES & INSTRUMENTS

DIRECT INSTRUMENTS CASH & LIQUIDITY RESERVE RATIOS DIRECTED CREDIT ADMINISTERED INTEREST RATES LIQUIDITY SUPPORT

PROCEDURES & INSTRUMENTS

INDIRECT INSTRUMENTS OPEN MARKET OPERATIONS BUYING AND SELLING SECURITIES, REPO, REFINANCE, DISCOUNT WINDOW LIQUIDITY ADJUSTMENT FACILITY

RBI-CURENCY AUTHORITY

RBI-CURENCY AUTHORITY
STATUTORY POWERS-SECTION 22 ASSET BACKING SECTION 33 GOLD & F.SECURITIES 200 CR GOLD 115 CR BIG CHANGE DUE TO REFORMS RUPEE SEC 95% TO 0.2% F.SECURITIES 3% TO 94% GOLD 6.8%

RBI-CURENCY AUTHORITY
PRINTING OF NOTES ADMINISTRATIVE ARRANGEMETS 15 OFFICES, 3 SUB-OFFICES, 4300 CURRENCY CHESTS & 3600 SMALL COIN DEPOTS SET PROCEDURES FOR EXCHANGE OF SOILED & DAMAGED NOTES

RBI-BANKER TO GOVT.
BANKER TO GOI-Sns. 20 & 21 TO STATE GOVTs. Sn.21 A FULL RANGE OF BANKING SERVICES PRINCIPAL ACCOUNTS AT NAGPUR AGENTS OF RBI FOR GOVT. BUSINESS

RBI-BANKER TO GOVT.
MANAGEMENT OF PUBLIC DEBTADVISE ON TIMING & TERMS OF ISSUE BORROWING AT MARKET RATES DEVELOPMENT OF DEBT MARKET PRIMARY DEALERS, INSTITUTIONAL INVESTORS

FOREIGN EXCHANGE MANAGEMENT

FOREIGN EXCHANGE MANAGEMENT

CUSTODIAN OF FOREX RESERVES FOREX RATE MANAGEMENT LINKED TO POUND STERLING IMF-PAR VALUES-GOLD CONVERTIBILITY @$35/OZ UPTO 71 1975-BASKET OF CURRENCIES MARCH 1993-MARKET DETERMINED RATES ORDERLY MARKETS----FERA TO FEMA

REGULATION OF BANKS
AIM-PROTECTION OF DEPOSITORS INTERESTS AND STABILITY OF FINANCIAL SECTOR

REGULATION OF BANKS
BANKING REGULATION ACT, 1949, RBI ACT, 1934, SBI ACT, 1955, BANKING COMPANIES ACT, 1970, RRBs ACT, 1976 ETC.,

REGULATION OF BANKS
LICENSING & BRANCH EXPANSION LIQUIDITY OF ASSETS MANAGEMENT-FIT & PROPER PRUDENTIAL NORMS EXPOSURE LIMITS, TRANSPARANCY DISCLOSURE NORMS RISK MANAGEMENT, CAPITAL ADEQUACY (BASEL) CONSOLIDATION-AMALGAMATION, LIQUIDATION

SUPERVISION OF BANKS
INSPECTIONS SINCE 1949 COVERING ALL ASPECTS OF BANKS WORKING OFF-SITE SURVEILLANCE-IN-HOUSE MONITORING THRU REPORTS

SUPERVISION OF BANKSNEW STRATEGY

ON-SITE INSPECTIONSCAMELS BIG TICKET LOANS-APPRAISAL, POSTSANCTION MONITORING ASSET CLASSIFICATION, IRAC NORMS, EXPOSURES, PROVISIONING ALM, PROFITABILITY INTERNAL CONTROL SYSTEMS MANAGEMENT, MIS RISK MANAGEMENT SET UP AUDITS

REGULATION & SUPERVISION OF FINANCIAL SYSTEM URBAN CO-OP BANKS & NONBANKING FINANCIAL COMPANIES PRIMARY DEALERS IN SECURITY MKT AUTHORISED DEALERS IN FOREX & MONEY CHANGERS NABARD, EXIM BANK, NHB, SIDBI,IIBI

PRUDENTIAL REGULATION -RBI

EASING OF CRR/SLR PRESCRIPTIONS FREEDOM IN LENDING & INT.RATES CAPITAL ADEQUACY, INCOME RECOGNITION, ASSET CLASSIFICATION, PROVISIONING NPA MANAGEMENT, CDR, DRT, LOK ADALATS EXPOSURE NORMS, DISCLOSURE NORMS

REGULATION
CONSOLIDATION/MERGERS/ACQUISITION WELL-DIVERSIFIED OWNERSHIP CORPORTAE GOVERNANCE ANTI-MONEY LAUNDERING CUSTOMER SERVICE ADOPTING INTERNATIONAL BEST PRACTICES

DEVELOPMENTAL ROLE

DEVELOPMENTAL ROLE
CO-OPERATIVE STRUCTURE, RURAL CREDITNABARD LEAD BANK SCHEME SERVICE AREA APPROACH

INDUSTRIAL CREDIT & EXPORT CREDIT---IFCI, IDBI, EXIM

 HOUSING---NHB

DEPOSIT INSURANCEDICGC PAYMENT & SETTLEMENT SYSTEM

THANK YOU & BEST WISHES