Functions and Department of RBI
The Reserve Bank of India influences the management of commercial banks through its various policies, directions and regulations. Its role in bank management is quite unique. It performs the four basic functions such as planning, organizing, directing and controlling in laying a strong foundation for the functioning of commercial banks.
RBI is the central bank of India and regulates the supply of money in the country. To regulate this supply and various other policies, RBI has dedicated various departments.
Various Departments and their Functions:
- Banking Department: The Banking Department is responsible for rendering the bank’s services as a banker to the Government and to the banks. Thus, there are 4 sub-divisions to this department
- Issue Department: The Issue department is concerned with the proper and efficient management of the note issue.
- Currency Management Department: This department is responsible for forecasting the long-term requirements of the currency and subsequently allocating it to the various other branches.
- Government and Bank Accounts Department: The main task of this department is to handle and maintain the various bank’s accounts in the banking and issuing departments.
- Budgetary Control and Expenditure Department: Under this department, the bank’s budget and various expenditures are monitored for the different units.
- Department of Exchange Control: This department is responsible for maintaining the exchange rate and controlling the foreign exchange. Also, they try to stabilize the exchange rate.
- Department for Industrial Credit: This department as the name suggests is related to the credit-related activities of the industries. So, their primary task is to provide various credit guarantee schemes for the small-scale industries and looking after their administration.
- Banking Operations and Development Department: This department looks after the commercial banks in India. They control, supervise, develop these banks. Earlier it was also related to bank credit and lead bank scheme for the priority sectors.
- Agriculture Credit Department: Under this department, the care is taken for various credit schemes in rural financing, providing financial resources to various co-operative banks.
- Non-banking Companies Department: The primary task of this department is to regulate the deposits related to non-banking financial companies. Further, it also controls and administers companies.
- Credit and Rural Planning Department: This is one of the oldest departments in the RBI. Also, it was established in the year 1982 and is concerned with the issues like lead bank scheme, credit plans for the district, provision for the expert assistance, processing the credit line for short-term loans the NABARD, and putting forward the policies for reserve bank regarding rural India.
- Economic Policy and Analysis Department: This department handles the economic reviews and research for banking and financial conditions of the country.
- Computer Services and Statistical Analysis Department: This department as the name suggests collects, generates, process, and compiles the statistical data related to the financial and banking sectors.
- Legal and Inspection Department: The inspection department carries out the inspections of the various departments and offices of the RBI. For the legal advice on various issues referred by the RBI, the legal department is responsible.
- Department of Administration and Personnel: It looks after the general administration and personnel policy, such as recruitment, training, placements, promotions, transfers, discipline, appeals, service conditions, wage structure, etc.
- Premises Department: It is mainly concerned with the construction of buildings for the Bank’s offices, training institutions and staff quarters.
- Management Services Department: It is basically concerned with organisational analysis, systems research and development, work procedure studies and codification, manpower planning, costing studies, etc.
- Reserve Bank of India Service Board: Its functions involve conducting of examinations/interviews for the selection and promotion of staff in the Reserve Bank.