Logistics and Supply Chain Management - Reserve Bank of India

Running head: Logistics and supply chain management
Logistics and supply chain management
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Logistics and supply chain management 1
Contents
Introduction...........................................................................................................................................2
Structure of RBI....................................................................................................................................2
Main objectives.....................................................................................................................................3
Roles and responsibility.........................................................................................................................3
Policy and procedures of RBI................................................................................................................4
Foreign exchange limits.........................................................................................................................6
Availability of information....................................................................................................................7
Are RBI Policies effective?...................................................................................................................7
Functions of RBI...................................................................................................................................8
Role of RBI in Demonetization.............................................................................................................9
Corporate social responsibility activities by RBI.................................................................................10
Conclusion...........................................................................................................................................10
References...........................................................................................................................................12

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Introduction
The Reserve Bank of India (RBI) is known as the central bank of India. It was introduced in
April 1, 1935 under the act of Reserve bank of India 1934, headquartered in Mumbai till date.
The central bank is fully controlled by the government of India. RBI was initiated with the
share capital of rupees five Crores divided into share of rupees hundred each which is fully
paid up (Reserve Bank of India, 2018).
Reserve Bank of India is controlled by the central board delegated by the central government
of India. It has total 22 regional offices in all over India. RBI is associated with India since
1949. The responsibility of directing and superintending the bank is in the hands of 20
members of board of directors, the Governor and 4 deputy Governors, one governmental
official from the ministry of finance. To represent the important elements regarding economic
life of the country, there are ten nominated directors by the government (NBD, Sudhakar,
Bhawan & Marg, 2017). The government has also nominated the four directors to represent
the four local boards which are located at Mumbai, Kolkata, Chennai and 29 New Delhi. The
central government has also appointed five members each under local board for a term of
four years to give the representation regarding territorial and economic interests and the
interests of cooperative and indigenous banks.
Structure of RBI
Reserve bank of India governs and supervises the financial system of the nation. RBI
involves several departments which regulates the several entities that contain India’s financial
infrastructure which are as follows:
Commercial banks and all- India development financial institutions: these institutions are
controlled by the Banking Operations and Development Department, delegated by the
Banking Supervision Department (India, 2015).
Urban Co-operative banks: these institutions are governed and supervised by the Urban
Banks Department
Regional Rural Banks (RRB), District Central Cooperative Banks and State Co-operative
Banks: these banks are controlled and governed by the department of Rural Planning and
Credit and delegated by NABARD.

Logistics and supply chain management 3
Non-Banking Financial Companies (NBFC): these companies are regulated and controlled by
the Non-Banking Supervision Department.
Main objectives
The essential objectives of RBI are as follows:
 Price stability and control of inflation.
 Economic growth.
 Exchange rate stability (Mukher, 2017).
Roles and responsibility
Governor of the financial system
The foremost responsibility of the RBI is to regulate the financial policy and promote the
banking facilities in the country. The central board involves four directors to tackle the
banking regulation and supervision (Exam Pariksha, 2017). It is essential for the central
board to meet once in every month. The main objective of the bank is to maintain the public
confidence in the system by protecting the funds of the depositors. It ultimately regulates the
monetary supply and also takes care of the economic indicators such as Gross domestic
product (GDP). It also has the responsibility to designs the notes and coins.
Managing foreign exchange
It is the most important responsibility of the bank to maintain the foreign exchange. Under
the act Foreign Exchange Management Act, 1999 the central bank aims at reaching the
several objectives (Exam Pariksha, 2017). The core objective of RBI is to maintain the
external trade and payment systems in order to facilitate the foreign exchange market in
India.
Issue of currency and other responsibilities
The core responsibility of RBI is to issue currency notes. It performs the function of
exchanging currency notes and coins and eradicates the same when the currency notes do not
get fit in the transmission. The money issued by them is the monetary liability of RBI. The
central bank is responsible to have back the currency with equal value of assets. The bank is
responsible for issuing notes and providing enough supply of funds.