SY BBA UNIVERSITY OF PUNE

PROJECT REPORT ON
“75 YEARS OF RESERVE BANK OF INDIA”

SUBMITTED TO

UNIVERSITY OF PUNE

SUBMITTED BY

MR. ABHISHEK JAGTAP

SY BBA (2023-24)

UNDER THE GUIDANCE OF

ASST PRO. SARITA GOYAL

THROUGH THE PRINCIPAL

ASM COLLAGE OF COMMERCE , SCIENCE & INFORMATION

TECHNOLOGY,
PIMPRI, PUNE - 411018
 Date :- 22-10-2023

CERTIFICATE

This is to certify that Mr. ABHISHEK BHAGWAN JAGTAP of Roll No. :- 2202001

having specialization in FINANCE has successfully completed his / her project titled

“75 YEARS OF RBI” as per the norms of Savitribai Phule Pune University under the

guidance Asst Pro. SARITA GOYAL for the academic year 2023-24.

Internal Guide External Guide

HOD Principal
 DECLARATION

I, Mr. Abhishek Bhagwan Jagtap (Roll No. 2102001) of Bachelor of

Bussiness Administration, Studying in ASM Collage of commerce and
management pune, hereby declare that information contained in the
project titled ―75 years Reserve Bank of India. Is true and correct to

the best of my knowledge and belief.

I, Mr. Ansari Akbar Ali (Roll No. 03) of Bachelor in Management Studies,
Studying in B. N. N. College, Bhiwandi, hereby declare that information
contained in the project titled ―Reserve Bank of India‖ is true and correct
to the best of my knowledge and belief.

ABHISHEK JAGTAP
(Name of the Student)
 ACKNOWLEDGEMENT

I am indebted to my project guide Asst Pro. Sarita Goyal, for helping me

out in the successful completion of my project Report on, ―75 Year of
Reserve Bank of India‖ I am thankful to my other teacher for providing
me information as and when required. I am extremely thankful to my
family members for their constant support Last, but not the least, comes
my friends who discussed with me the various issues in my project.
Finally, I want to thank one all that helped me directly or indirectly for the
project work

Abhishek Jagtap
(Name of the Student)
 INDEX

Sr. No. TITLE PAGE NO.

1. Declaration 1

2. Acknowledgement 2

3. Certificate 3

4. Introduction 4

5. RBI Tradition & Change 8

6. Expert views on RBI monetary policy review 12

7. Objectives of Research 18

8. Types of Data 23
9. Significance of Research 26

10. Structure, Organisation & Governance 30

11. Main Activities of RBI 34

12. Conclusion 35

13. References 36
RESERVE BANK OF INDIA
 INTRODUCTION

The Reserve Bank Of India is the nation central bank—

Since 1935, when we began operation we have stood at the centre of

India‘s financial system, with a fundamental commitment to
maintaining the nation‘s monetary and financial stability.

From ensuring stability of interest and exchange rates to providing

liquidity and an adequate supply of currency and credit for the real
sector; from ensuring bank penetration and safety of depositor‘s
funds to promoting and developing financial institutions and
markets, the Reserve Bank plays a crucial role in the economy. Our
decisions touch the daily life of all Indians and help chart the
country‘s current and future economic and financial course.

Over the years, our specific roles and functions have evolved.
However ,there have been certain constants ,such as the integrity
and professionalism with which the Reserve Bank discharges its man
date.
 RBI At a Glance
�ManagedbyCentralBoardofDirectors

�India‘smonetaryauthority

�Supervisoroffinancialsystem

�Issuerofcurrency

�Managerofforeignexchangereserves

�Bankeranddebtmanagertogovernment

�Supervisorofpaymentsystem

�Bankertobanks

�Developmentalfunctions

�Research,dataandknowledgesharing
The Reserve Bank:

Tradition and Change

The origin of the Reserve Bank can be traced to 1926, when the Royal
Commission on Indian Currency and Finance—also known as the Hilton-
1Young Commission—recommended the creation of a central bankto separate the
control of currency and credit from the government and to augment banking
facilities throughout the country.The Reserve Bank of India Act of 1934
established the Reserve Bank as the banker to the central government and set in
motional series of actions culminating in the start of operations in 1935. Since
then, the Reserve Bank‘s role and functions have undergone numerous
changes—as the nature of the Indian economy has changed. Today‘s RBI bears
some resemblance to the original institution, although our mission has
expanded along with our deepened, broadened and increasingly globalised
economy.
 Celebrating 75 years:

1935 :- Operation begin on April 1

1949:- Nationalisation of the Reserve Bank of India; Banking

Regulation Act enacted

. 1950:- India Embarks on planed economic development. The Reserve

Bank of India
becomes active agent and participants.

1966:- Cooperative Bank came under RBI Regulation.

1969:- Nationalisation of 14 major commercial Bank (Six more bank

nationalize in 1980)

1973:- RBI strengthen exchange control by amendingForeign Exchange

Regulation Act.

1974:- Introduction of priority sector lending targets

1975:- Regional Rural Bank Setup

1985:- Financial market reforms begins with Sukhamoy Chakravaty

and Vaghul Committee Report.
 1991:- India faces Balance of Payment crisis, pledges gold to
shore up reserve. Rupee devalued.

1993:- Exchange rate become market determined

1994:- Board of Financial Supervision Setup.

Expert’s views on RBI monetary policy review

Mumbai, (IANS) The Reserve Bank of India (RBI) kept key policy
rates unchanged in the first quarter review of monetary policy
announced Tuesday. Following are the comments from experts on the
monetary policy statement.
Anis Chakravarty, senior director, Deloitte in India

This is a bold step from RBI and it certainly needs to be

appreciated. With headline inflation persistently remaining above
comfort level of 7 percent, this policy stance of retaining repo rate
looks justified despite obvious impact of tight monetary policy for past
two years on the growth slowdown. Although SLR is expected to
maintain liquidity levels, it may not show any significant impact as the
liquidity conditions have been already eased out since the April
policy, which included injection of liquidity by way of open market
operations.

Harsh Pati Singhania, president, International Chamber of Commerce

India and managing director, JK Paper Ltd.

It is disappointing that RBI has chosen not to cut policy rates. Reduction
in the SLR does not make any difference in the present scenario as
credit growth has not picked up due to higher rates of interest. In fact, by
following this path RBI is not taking any constructive steps to either
control inflation or stimulate economic growth. It has squarely put the
onus of reviving growth with the government. May be it is time we
started looking at the paradigm of living with a slightly higher
inflation accompanied with higher growth.‖

R.V. Kanoria, president, Federation of Indian Chambers of

Commerce and Industry (FICCI)
The central bank and the government need to coordinate and find
a solution to balance the monetary policy, improve the fiscal situation
and to get growth back in the economy. The situation in the economy
calls for urgent and decisive action and the two primary agencies
RBI and government – responsible for policy making should prepare an
effective roadmap together.‖
Chandrajit Banerjee, director general, Confederation of Indian Industry
(CII)
A cut in policy rates, at this juncture, would have done much to infuse
liquidity in the system which is facing tight liquidity conditions, spur
investments among corporates and rev up growth momentum in the
economy. RBI had sufficient head room to cut interest rates as falling
global commodity prices, stable core and manufacturing inflation
would ease the pressure on prices. In fact, despite having raised interest
rates in the past, inflation has persisted while adversely impacting
industrial growth and business sentiment. The need of the hour is
administrative actions on the part of the government to ease supply
bottlenecks which will help ease inflationary pressure.‖

Siddharth Shankar, Director, KASSA group Monetary policy will not

stimulate growth nor would government policy, now it is for the industry
to act and make itself more efficient. From the policy front I feel
government will have to keep the social and agricultural aspect in mind,
much over the industry.

Growth in India is likely to remain low with high inflation something and
this is a very uncomfortable situation of stagflation. While the GDP
forecast is 6.5 percent to my mind it would be below 6 percent
mark for current financial year.‖

A Sakthivel, chairman, Apparel Export Promotion Council (AEPC)

The Reserve Bank of India has kept interest rate unchanged, thereby
keeping the cost of funds very high. The industry was expecting
downward trend in the interest rate so that cost of manufacturing can be
reduced.‖

Murthy Nagarajan, head, fixed income, Tata Asset Management Limited

RBI focus is clearly on managing inflation expectations getting

retrenched in the economy even against a scenario of falling GDP
growth rates. By cutting SLR, it is releasing more money for banks
who have SLR at the margin, to lend to the corporate sector. RBI
has stated it is ready to do what is required, if government cuts its
subsidy burden and reduce supply side bottleneck pressure on the
economy.‖
Lalit Kumar Jain, chairman, Kumar Urban Development and president,
CREDAI.

There is once again disappointment from RBI. There was no change in

the rates in previous policy announcement and the real estate sector
was expecting a rate cut this time.

Both, the developer community and the home buyers are unhappy with
results of the policy and this will affect the already disheartened real
estate sector. We don‘t see any positive policies from government
which will boost the real estate sector and economy as well. We keep
our fingers crossed and hope the next credit policy will bring some cheer
to the industry.‖
 OBJECTIVES OF RESEARCH:

The purpose of research is to discover answers to questions through

theapplication of scientific procedures. The main aim of research is to find out
thetruth which is hidden & which has not been discovered as yet.
Though eachresearch study has its own specific purpose

TYPES OF RESEARCH:

The basic types of research are as follows:

1.Descriptive V/s Analytical.

2.Applied V/s Fundamental.

3.Quantitative V/s Qualitative.

4.Conceptual V/s Empirical.

5.Some other types of research.

 Types of Data

Primary Data:

Data that has been collected from first-hand-experience is known as primary

data.Primary data has not been published yet and is more reliable, authentic
andobjective. Primary data has not been changed or altered by human beings,
thereforeits validity is greater than secondary data.

Importance of Primary Data:

Importance of Primary data cannot be neglected. A research can be

conductedwithout secondary data but a research based on only secondary data is
least reliableand may have biases because secondary data has already been
manipulated byhuman beings. In statistical surveys it is necessary to
get information from primarysources and work on primary data: for example,
the statistical records of female population in a country cannot be based
on newspaper, magazine and other printedsources. One such sources are old and
secondly they contain limited information aswell as they can be misleading and
biased.

Validity:

Validity is one of the major concerns in a research. Validity is the qualityof a

research that makes it trustworthy and scientific. Validity is the use ofscientific
methods in research to make it logical and acceptable. Using primarydata in
research can improves the validity of research. First hand informationobtained
from a sample that is representative of the target population will yielddata that
will be valid for the entire target population.

Authenticity:

Authenticity is the genuineness of the research. Authenticity can beat stake if

the researcher invests personal biases or uses misleading information in
he research. Primary research tools and data can become more authentic if
themethods chosen to analyze and interpret data are valid and reasonably
suitable forthe data type. . Primary sources are more authentic because the facts
have not beenoverdone.

Primary source can be less authentic if the source hides information oralters
facts due to some personal reasons. Their are methods that can be employedto
ensure factual yielding of data from the source.

Reliability:

Reliability is the certainty that the research is enough true to be trustedon. For
example, if a research study concludes that junk food consumption doesnot
increase the risk of cancer and heart diseases. This conclusion should have
to be drawn from a sample whose size, sampling technique and variability is not
questionable.

Reliability improves with using primary data. In the similar researchmentioned

above if the researcher uses experimental method and questionnairesthe results
will be highly reliable. On the other hand, if he relies on the dataavailable in
books and on internet he will collect information that does notrepresent the real
facts.

Sources of Primary Data:

Sources for primary data are limited and at times it becomes difficult to obtain
datafrom primary source because of either scarcity of population or lack
ofcooperation. Regardless of any difficulty one can face in collecting primary
data; itis the most authentic and reliable data source. Following are some of the
sources of primary data.

Experiments:

Experiments require an artificial or natural setting in which to perform

logical study to collect data. Experiments are more suitable for
medicine, psychological studies, nutrition and for other scientific studies.
In experiments the experimenter has to keep control over the influence of any
extraneous variable onthe results
Survey:

Survey is most commonly used method in social sciences,

management,marketing and psychology to some extent. Surveys can be
conducted in differentmethods.Questionnaire: is the most commonly used
method in survey. Questionnairesare a list of questions either open-ended or
close -ended for which therespondent give answers.

Questionnaire can be conducted via telephone,mail, live in a public area, or in

an institute, through electronic mail orthrough fax and other methods.Interview:

Interview is a face-to-face conversation with the respondent. Ininterview the

main problem arises when the respondent deliberately hidesinformation
otherwise it is an in depth source of information.

Theinterviewer can not only record the statements the interviewee speaks but
hecan observe the body language, expressions and other reactions to
thequestions too. This enables the interviewer to draw conclusions
easily.Observations:

Observation can be done while letting the observing personknow that he is

being observed or without letting him know. Observationscan also be made in
natural settings as well as in artificially createdenvironment.

Secondary Data:

Data collected from a source that has already been published in any form is
calledas secondary data. The review of literature in nay research is based on
secondarydata. MNostly from books, journals and periodicals.
 Importance of Secondary Data:

Secondary data can be less valid but its importance is still there. Sometimes it
isdifficult to obtain primary data; in these cases getting information from
secondarysources is easier and possible. Sometimes primary data does not exist
in suchsituation one has to confine the research on secondary data. Sometimes
primarydata is present but the respondents are not willing to reveal it in such
case toosecondary data can suffice: for example, if the research is on the
psychology oftranssexuals first it is difficult to find out transsexuals and second
they may not bewilling to give information you want for your research, so you
can collect datafrom books or other published sources.

Sources of Secondary Data:

Secondary data is often readily available. After the expense of electronic

mediaand internet the availability of secondary data has become much easier.

Published Printed Sources:

There are variety of published printed sources. Theircredibility depends on

many factors. For example, on the writer, publishingcompany and time and date
when published. New sources are preferred and oldsources should be avoided as
new technology and researches bring new facts intolight.Books: Books are
available today on any topic that you want to research.The use of books start
before even you have selected the topic. Afterselection of topics books provide
insight on how much work

haalready been done on the same topic and you can prepare your literature
.Books are secondary source but most authentic one in secondary source
 SIGNIFICANCE OF RESEARCH:

The role of research in several fields of applied economics, whether relatedto

business or to the economy as a whole, has greatly increased in modern times.

The increasingly complex nature of business & government has focused

attention on the use of research in solving operational problems. Research, as
an aid toeconomic policy, has gained added importance, both for government
& business.

RESEARCH & SCIENTIFIC METHOD:

The scientific method is, thus, based on certain basic postulates which can be
stated as:1.

It relies on empirical evidence.2.

It utilizes relevant concepts.3.

It is committed only to objective considerations.4.

It pre supposes ethical neutrality.5.

It results in to probabilistic predictions.6.

Its methodology is made known to all concerned for critical scrutiny & foruse in
testing the conclusions through replications.7.

It aims at formulating more general axioms or what can be termed asscientific

theories.
RESEARCH PROCESS:

Research process consists of series of actions or steps necessary toeffectively

carry out research & the desired sequencing of its steps.

However, the following order concerning various steps provides auseful

procedural guideline regarding the research process:

1.Formulating the research problem.

2.Extensive literature survey

3.Developing the hypothesis.

4.Preparing the research design

5.Determining the sample design.

a.Deliberate sampling

b.Simple random sampling.

c.Systematic sampling.

d.Stratified sampling.

e.Quota sampling.

f.Cluster sampling & area sampling.

g.Multi-stage sampling.

h.Sequential sampling.

6.Collecting the data.

a.By observation.

b.Through personal interviews.

c.Through telephone interview.

d.By mailing of Questionnaire.

e.Through schedules.

7.Execution of the project.

8.Analysis of the data

9.Hypothesis testing.

10.Generalizations & interpretations.

11.Preparation of the report or presentation of the results.

a.Introduction.

b.Summary of findings.

c.Main report.

d.Conclusion
 Structure, Organisation and Governance:

How They Function:

The Reserve Bank is wholly owned by the Government of India. TheCentral

Board of Directors oversees the Reserve Bank‘s business.

About the Central Board

The Central Board has primary authority for the oversight of the Reserve Bank.
Itdelegatesspecific functions to its committees and sub-committees.

Central Board:
Includes the Governor,Deputy Governors and the nominatedDirectors
andagovernment nominee-Director

Committee of Central Board:

Overseesthe current business of the centralbank and typically meets every
week,onWednesdays. The agenda focusses oncurrent business, including
approval ofthe weekly statement of accounts related to the Issue and Banking
Departments.

Board for Financial Supervision:

Regulates and supervises commercial banks, Non-Banking Finance
Companies(NBFCs), development finance institutions, urban co-operative
banks and primarydealers.

Board for Payment and Settlement Systems:

Regulates and supervises thepayment and settlement systems
 Sub-committees of the Central Board:

Includes those on Inspection and Audit; Staff; and Building. Focus of

eachsubcommittee is on specific areas of operations.

Local Boards:

In Chennai, Kolkata, Mumbai and New Delhi, representing the country‘s four
regions. Local board members, appointed by the Central Government for four-
yearterms, represent regional and economic interests and the interests of co-
operativeand indigenous banks

Central Board of Directors by the Numbers Official Directors

1 Governor

4 Deputy Governors, at a maximum

Non-Official Directors
4 directors —nominated by the Central Government to representeach local
board

10 directors nominated by the Central Government with expertisein various

segments of the economy

1 representative of the Central Government

6 meetings — at a minimum — each year

1 meeting — at a minimum — each quarter

 Main Activities of the RBI:

What They Do:

The Reserve Bank is the umbrella network for numerous

activities, allrelated to the nation’s financial sector,
encompassing andextending beyond the functions of a
typical central bank. Thissection provides an overview
ofour primary activities:

Monetary Authority

Issuer of Currency

Banker and Debt Manager to Government

Banker to Banks

Regulator of the Banking System

Manager of Foreign Exchange

Regulator and Supervisor of the Paymentand Settlement

Systems

Developmental Role
 Monetary Authority:

Monetary policy refers to the use of instruments under the control of the
central bank to regulate the availability, cost and use of money and credi
t.The goal:achieving specific economic objectives, such as low and
stableinflation and promoting growth.

The main objectives of monetary policy in India are:

Maintaining price stability Ensuring adequate flow of credit to

the productivesectors of the economy to support economic growth Finan
cial stability.

The relative emphasis among the objectives varies from time to time,
depending onevolving macroeconomic developments.The basic
functions of the ReserveBank of India are to regulate theissue of Bank
notes and the keepingof reserves with a view to

securing ―
- From the Preamble of
monetary stability in India and
the Reserve Bank of India Act, 1934

generally to operate the currency andcredit system of the country to

its advantage
 Issuer of Currency:

The Reserve Bank is the nation‘s sole

note issuing authority. Along with theGovernment of India, we are
responsible for the design and production and overall management of
the nation‘s currency, with the goal of ensuring an adequate supply of
clean and genuine notes.

The Reserve Bank also makes sure there is an adequatesupply of coins,

produced by the government.In consultation with the government,we
routinely addresssecurity issues and target ways to enhance security
features toreduce the risk of counterfeiting or forgery.

Their Approach:

The Department of Currency Management in Mumbai, in cooperation

with the Issue Departmentsin the Reserve Bank‘s regional offices,
oversees the production and manages the distribution of currency.

Currency chests at more than 4,000 bank branche typically

commercial banks contain adequatequantity of notes and coins so
that currency isaccessible to the public in all parts of the country
 Banker to Banks:

Like individual consumers, businesses and organisations of all kinds,

banks needtheir own mechanism to transfer funds and settle inter-bank
transactions
such as borrowing from and lending to other banks

and customer transactions. As the banker to banks, the Reserve Bank

fulfills this role. In effect, all banks operating inthe country have accounts
with the Reserve Bank, just as individuals and businesses have
accounts with their banks.

Their Approach:

As the banker to banks, we focus on:

Enabling smooth, swift and seamless clearing andsettlement of inter-

bankobligations.

Providing an efficient means of funds transferfor banks.

Enabling banks to maintain their accounts withus for purpose of

statutoryreserve requirementsand maintain transaction balances.Acting
as lender of the last resort.
 Manager of Foreign Exchange

With the transition to a market-based system for determining the

external value ofthe Indian rupee, the foreign exchange market in India
gained importance in theearly reform period. In recent years, with
increasing integration of the Indianeconomy with the global economy
arising from greater trade and capital flows, theforeign exchange market
has evolved as a key segment of the Indian financialmarket.

Our Approach
The Reserve Bank plays a key role in the regulationand development of
the foreignexchange market andassumes three broad roles relating to
foreign exchange:

Regulating transactions related to the external sectorand facilitating

thedevelopment of the foreignexchange market.

Ensuring smooth conduct and orderly conditions inthe domestic

foreignexchange market.

Managing the foreign currency assets and goldreserves of the country.

 Developmental Role

This role is, perhaps, the most unheralded aspect of our activities,yet it
remainsamong the most critical. This includes ensuring that creditis
available
the productive sectors of the economy, establishinginstitutions designed
to build the country‘s financial infrastructure,expanding access to
affordable financial services and promoting financial education and
literacy.

Our Approach
Over the years, the Reserve Bank has added newinstitutions as the
economy hasevolved. Some of theinstitutions established by the RBI
include:

Deposit Insurance and Credit Guarantee Corporation (1962), to

provide protection to bank depositorsand guarantee cover to credit faciliti
es extendedtocertain categories of small borrowers

Unit Trust of India (1964), the first mutual fundof the country

Industrial Development Bank of India (1964),a development finance

institutionfor industry

National Bank of Agriculture and Rural Development(1982), for

promoting ruraland agricultural credit

Discount and Finance House of India (1988), a moneymarket

intermediary and a primary dealer ingovernment securities

National Housing Bank (1989), an apexfinancial institution for promoti

ng andregulatinghousing finance

Securities and Trading Corporation of India (1994), a primary dealer

 Conclusion

From the above all mentioned fact in this project one can easily say that
TheReserve Bank of India is the central bank of the country. Central
banks are arelatively recent innovation and most central banks, as we
know them today, wereestablished around the early twentieth century.

The Reserve Bank of India was setup on the basis of the

recommendations of the Hilton 1934) provides the
statutory basis of the functioning of the Bank, which commenced operati
ons on April 1,1935 Young Commission.

Following given below are some important-

I. Objectives of the Reserve Bank of India:

The Reserve Bank of India Act, 1934 sets out the objectives of the
Reserve Bank:'...to regulate the issue of Bank notes and the keeping of
reserves with a view tosecuring monetary stability in India and generally
to operate the currency andcredit system of the country to its advantage.

'The formulation, framework and institutional architecture of monetary

policy inIndia have evolved around these objectives
maintaining price stability, ensuringadequate flow of credit to sustain the
growth momentum, and securing financialstability
 References

Books
1)Indian Economy
Tr Jain, Mukesh Trehan

2)Principles Of Management
P C Tripathi , P N Reddy

3)Money Banking & Finance: Magical Book Series

N.K. Sinha

4)Banking & Finance : BBA III SEM

NIRALI PRAKASHAN

&

Subject Teacher