If you are appearing for an IBPS exam, it is very important that you have a fine knowledge of the banking sector. The most important bank of a country is the central bank which is responsible for supervising the working of all commercial banks. The central bank of India, as most of you might be aware of is the RBI or The Reserve Bank of India. The governor of the RBI is appointed by the government of India for a fixed time period. Knowing about the governor of RBI forms a very important part of your banking awareness. IBPSExamAdda.org.in brings you latest banking awareness 2015 material. We also have banking awareness PDF download available for our readers!
The present governor of RBI is Mr. Raghuram Rajan, to know more about him Click Here.
Banking Awareness: Roles, duties and responsibilities of the RBI Governor
1. First of all, the Reserve Bank of India is responsible for maintaining the financial stability in an economy, since the governor of RBI is the head of the most prestigious financial institution, he plays a major role in formulating the policies of RBI.
2. Apart from formulating policies, the governor of the RBI also is responsible for issuing licenses to open new private and foreign banks.
3. The governor of the RBI is responsible for controlling the interest rates on deposits and advances of the country. However this control is limited to the extent of prescribing interest rates on savings account and a minimum lending rate.
4. The governor of the RBI is responsible for regulating and administering the financial system of the nation. He is responsible for setting parameters within which the whole financial system will function. Not a rupee can be moved without the permission of the governor of RBI.
5. The foreign exchange management Act, 1999 which is to facilitate external trade and payment and to promote orderly development and maintenance of foreign exchange market in India is managed by the governor of RBI.
6. The RBI governor is further responsible to monitor the issue and destruction of currency and coins which are not fit for circulation in public. He is also responsible to monitor the adequate quantity of currency notes and coins are supplied and in good quality.
7. He also has a major role to play when it comes to helping and promoting functions in order to support national objectives.
8. Along with his team, the governor of the Reserve Bank of India has to continually review rules and regulations in order to make them more customer friendly.
9. The RBI governor is responsible for leading and supervising primary co-operative banks which are in more popular terms known as “Urban co-operative banks”. He does this through his Urban Banks Department
10. The governor of the Reserve Bank of India also has a part to play in monitoring and facilitating flow of credit to rural, agricultural and various small scale industries sectors. He is also responsible for framing policies on priority sector and supporting the agriculture banks. Further, the governor is responsible for regulating regional rural banks, state co-operative banks and various local area banks.
11. You must be aware that the government has various poverty alleviation schemes in order to eradicate poverty from India. The governor of RBI monitors these schemes as well.
Powers of the RBI Governor:
The man who is the governor of the Reserve Bank Of India is the head of all the commercial banks as well. His decisions have the power to influence both macro and microeconomics enormously. Not only the banks but even the stock market, the economy and the lives of people are influenced by his actions. He is the banker’s banker and is no less than a luminary in the world of banking. It can be said that whenever the RBI governor sneezes or coughs, the whole stock market may catch cold. Being the head of the only institution that can issue currency notes, the governor’s autograph appears on the currency notes and he is the one who controls the country’s monetary, currency and credit system.
We hope that we provided you with the necessary information on the governor of RBI and played a part in improving your banking awareness.