Exchange reserves maintaining the forex trading in india rbi guidelines for nbfcs value of domestic currency. Ensures the internal value of currency.
Publishers the Economics Statistics and other. The following are the important functions of RBI. Promotional of banking habit and expansion of banking systems. Extension of facilities for the Small Scale Industries. Inspect and make enquiry or determine position in respect of matters under various sections of RBI and Banking Regulation Act.
Periodical review of review of the work of commercial banks. Ensuring the health of financial system through on-site and off-site verifications. Let us discuss the important functions one by one in detail. The RBI functions on the traditional lines regarding the following activities. In terms of Section 22 of the Reserve Bank of India Act, the RBI has been given the statutory function of note issue on a monopoly basis.
The note issue in India was originally based upon “Proportional Reserve System”. According to the RBI Amendment Act of 1957, the bank should now maintain a minimum reserve of Rs. 200 crore worth of gold coins, gold bullion and foreign securities of which the value of gold coin and bullion should be not less than Rs. The Government of India issues rupee coins in the denomination of Rs. Section 38 of the RBI Act. The RBI presently issues notes of denominations Rs. RBI manages circulation of money through currency chests.
Originally RBI issued currency notes of Rs. The value of currency with public as on June 1991 was only to the extent of Rs. However, this value went up to Rs. 145182 crore in June 1998 and further to Rs. Currency Chests Currency Chests are receptacles in which stocks of issuable and new notes are stored along with rupee coins. Currency Chests are repositories run by RBI, SBI, subsidiaries of SBI, public sector banks, Government Treasuries and Sub treasuries.
Chests help in expansion and contraction of currency in the country. The bank can draw funds whenever it is required for its use and deposit funds when found surplus. The currency chests maintained by public sector and few private sector banks are the property of RBI. The value of currency held in the chest belongs to RBI.
There are as many as 4150 currency chests with banks in India. The RBI acts as banker to the Government under Section 20 of RBI Act. Section 21 provides that Government should entrust its money remittance, exchange and banking transactions in India to RBI. Under Section 21A RBI has to conduct similar transactions for State Governments also.