Reserve Bank of India
01. Central
bank is a bank which acts as a banker to the government; has monopoly of
note issue and controls the entire banking system
02. RBI is the
central bank in India
03. RBI was
established by an act of Parliament in 1934
04. The
initial share capital for RBI was Rs. 5 crores
05. RBI was
nationalized under (transfer of public ownership) act 1948
06. Its
affairs are regulated by central board of directors
07. It has
four regional centres at Mumbai, Kolkatta, Chennai and Delhi
08. The
central office of the bank is at Mumbai
09. RBI is note
issuing authority; banker, agent and financial adviser to the government;
custodian of cash reserves of banks; custodian of nation’s reserves of foreign
exchange; lender of the last resort; controller of credit etc.
10. Currency
notes other than one rupee notes are issued by RBI
11. RBI has
credit control – regulation of cash reserves of commercial banks, regulating
the flow of credit, qualitative control and open market operations
12. Handles all
government transactions
13. It is a
banker’s bank
14. It
maintains the exchange rate for the Indian rupee; hold the country’s
reserves in foreign currencies and administration of the exchange management
regulations
Scheduled commercial banks
15. They are
included in the second schedule to the RBI act, 1934
16. They can
avail facilities from RBI – accommodation in the form of refinance and loans
and advances; remittance facility at concessive rates as also grant of
authorized dealer’s license to handle foreign exchange business.
17. Have paid
up capital and reserves – aggregate value of not less than Rs. 5 lakhs.
18. It can be
a state cooperative bank or company registered under the companies act
19. Scheduled
commercial banks are – State Bank of India and associates, nationalized
banks, private sector banks, regional rural banks, urban cooperative banks,
state cooperative banks
20. Scheduled
Commercial Banks to maintain CRR up to 3 percent of their demand and time
liabilities which can go upto a maximum
of 15 percent
Public sector banks
21. State Bank
of India and associate banks
22. Nationalized
banks – 20
23. Banks were
nationalized on 19.07.1969 - fourteen
banks
24. Nationalised
banks are: Central Bank of India, Bank of India, Bank of Baroda, Allahabad
Bank, Union Bank of India, United Commercial Bank, Indian Overseas Bank, Indian
Bank, Canara Bank, Syndicate Bank, Punjab National Bank, United Bank of India,
Dena Bank, Bank of Maharashtra, Andhra Bank, Corporation Bank, Oriental Bank of
Commerce, Punjab and Sind Bank and Vijaya Bank. (19) and Industrial Development
Bank of India = 20
Development banks
25. Industrial
Finance Corporation of India is a development bank
26. Its
operations are project finance, financial services and corporate advisory
services
27. Industrial
Investment Bank of India was set up in 1971 for rehabilitation of sick
industrial companies.
28. Reconstituted
as Industrial Reconstruction Bank of India in 1985 under the IRBI act, 1984
29. IRBI was
incorporated in March, 1997 as Industrial Investment Bank of India Limited
under the companies act, 1956
30. SIDBI was
set up in 1990 under an act of parliament (SIDBI) act 1989 as a wholly owned
subsidiary of IDBI
31. It is the
principal financial institution for promoting and financing development of
industry in the small scale sector
32. 14 banks
were nationalized on 19th July 1969
New Private sector banks
33. New
private sector banks were formed as per RBI guidelines 1993
34. They were
registered under companies act 1956
35. They were
included in second schedule to the RBI act, 1934
36. The
minimum paid up capital of a new bank shall be Rs. 100 crores
37. Priority
sector lending norms should be adopted by these banks
38. The banks
are governed by the provisions of the RBI act, 1934, the Banking regulation
act, 1949 and other relevant statutes.
39. They are
not allowed to set up a subsidiary or mutual fund for at least three years
after their establishment
Regional Rural banks
40. Regional
Rural banks were established on 2.10.1975
41. To develop
rural economy by providing credit and other facilities for the purpose of
development of agriculture, trade, commerce, industry and other productive
activities in rural areas, particularly to the small and marginal farmers,
agricultural laborers, artisans and small entrepreneurs
42. They are scheduled
commercial banks
43. Included
in second schedule to RBI act, 1934
44. The gross
NPAs of regional rural banks should not be more than 10 percent.
45. The banks
should comply with the IRDA regulations for acting as a corporate agent
46. The
authorized capital of a regional rural bank is Rs. 5 crore and issued/paid
up capital minimum of Rs. 25 lakhs and maximum of Rs. 100 lakhs
47. The
prescribed minimum level of share holding should be 51 percent for sponsor institutions
Local Area banks
48. Local area
banks were established on 24.08.1996
49. They were
set up in the private sector to cater to credit needs of the local people and
to provide efficient and competitive financial intermediation services in their
area of operation
50. They are
required to observe the priority sector lending target of 40 percent of net
bank credit, as applicable to other domestic banks, out of which 25 percent
shall be given to weaker sections
51. They were
registered as public limited companies as per Companies act, 1956.
52. They got
licence as per Banking regulation act 1949
53. Included
in the second schedule to RBI act, 1934
54. They have
the minimum paid up capital of Rs. 5 crore
55. Promoters’
contribution to be Rs 2 crores.
56. They can
be promoted by individuals, corporate entities, trusts and societies
57. The area
of operation of local area bank shall be a maximum of three geographically
contiguous districts.
58. To comply
with the provisions of the Banking Regulation act, 1949, RBI act, 1934 and
other statutes
59. They are
subject to prudential norms, accounting policies and other policies laid down
by RBI
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