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The rating system GIVEN by RBI for banking sector is known as CAMELS.

The significance of CAMELS is as follow:-

• C - Capital adequacy ratio
• A - ASSET QUALITY (level of NPA)
• M - MANAGEMENT effectiveness
• E - Earning (profitability)
• L - Liquidity
• S - System and control

The rating system given by RBI for banking sector is known as CAMELS.

The significance of CAMELS is as follow:-

RBI accomplishes the off-site SURVEILLANCE by MEANS of OFF-SITE SURVEILLANCE AND MONITORING SYSTEM (OSMOS).

RBI accomplishes the off-site surveillance by means of OFF-SITE SURVEILLANCE AND MONITORING SYSTEM (OSMOS).

Following are some PARA-BANKING activities:-

• Mutual funds business
• Asset management
• Insurance business
• Merchant banking
• FACTORING SERVICE
• EQUITY participation in VENTURE capital
• Leasing

Following are some PARA-BANKING activities:-

RBI PERMITS the bank to PERFORM some ACTIVITIES other than banking. This is KNOWN as PARA-BANKING.

RBI permits the bank to perform some activities other than banking. This is known as PARA-BANKING.

Two types of FUND management schemes were introduced by the RBI which HELP the BANKS to maintain their funds:-

1. Centralised fund management SYSTEM (CFMS)
2. Transfer of funds across deposit account department (DAD)

Two types of fund management schemes were introduced by the RBI which help the banks to maintain their funds:-

WMA stands for “Way and Mean ADVANCES”. It is a short term loan from RBI to the GOVERNMENT OF INDIA which allows government to meet their financial requirements.

WMA stands for “Way and Mean Advances”. It is a short term loan from RBI to the GOVERNMENT OF INDIA which allows government to meet their financial requirements.

The GOVERNMENT OF INDIA has the authority of minting coins under the advisory of RBI.

The minting of coins is operated in the FOLLOWING cities:-

• Mumbai
• Noida
• KOLKATA
• HYDERABAD

The GOVERNMENT OF INDIA has the authority of minting coins under the advisory of RBI.

The minting of coins is operated in the following cities:-

There are four PRINTING presses are available in India for printing notes. They are LOCATED at:-

1. DEWAS (MADHYA Pradesh)
2. Nasik (Maharashtra)
3. Mysore (Karnataka)
4. Salboni (West BENGAL)

There are four printing presses are available in India for printing notes. They are located at:-

The general techniques used by SCCS are:

• Minimum margin for lending against SECURITY specified commodities is fixed.
• Ceiling on maximum ADVANCES to individual BORROWER against stock of certain commodities.
• Minimum DISCRIMINATORY rates of interests prescribed for certain kinds of advances.
• Prohibition of clean advances for financing hoardings of sensitive commodities.
• Prohibition of the discounting of bills covering sale of sensitive commodities.

The general techniques used by SCCs are:

SCC depends upon the FOLLOWING factors:

• The AVAILABILITY of non-bank finance.
• The extent of effective CREDIT restrictions
• The degree of SHORTFALL in SUPPLY in relation to normal demands.

SCC depends upon the following factors:

The acronym of SCC is Selective Credit Control. It refers to the directives issued by RBI BANKING Regulation ACT 1949 to regulate the flow of bank credit against the selected commodities.

The acronym of SCC is Selective Credit Control. It refers to the directives issued by RBI Banking Regulation Act 1949 to regulate the flow of bank credit against the selected commodities.

On 15 MAY 2013 RBI launched a new INSTRUMENT called “Inflation Index Bonds (IIBs)” to PROTECT the savings of poor and MIDDLE class people from inflation and insensitive household SECTORS.

On 15 May 2013 RBI launched a new instrument called “Inflation Index Bonds (IIBs)” to protect the savings of poor and middle class people from inflation and insensitive household sectors.

WHENEVER the bank has any SHORTAGE of fund they can borrow it from RBI. Repo RATE is the rate at which the bank can borrow the amount from RBI.

Whenever the bank has any shortage of fund they can borrow it from RBI. Repo rate is the rate at which the bank can borrow the amount from RBI.

In Market Stabilization Scheme LARGE capital flow is absorbed through selling of short-dated government securities and treasury BILLS.

In Market Stabilization Scheme large capital flow is absorbed through selling of short-dated government securities and treasury bills.

There are four types of repos are in INTERNATIONAL Market:

1. Buy-sell back REPO
2. CLASSIC Repo
3. BOND lending/borrowing Repo
4. Tripartite Repo

There are four types of repos are in International Market:

NATIONAL Bank for AGRICULTURE and Rural Development (NABARD) is the only Majority STACK SUBSIDIARY of RBI.

National Bank for Agriculture and Rural Development (NABARD) is the only Majority Stack Subsidiary of RBI.

RBI has three fully own subsidiaries: 

1. National HOUSING Bank(NHB)
2. DEPOSIT Insurance and Credit Guarantee CORPORATION of India(DICGC)
3. Bharatiya RESERVE Bank Note Mudran Pvt. LTD.(BRBNMPL)

RBI has three fully own subsidiaries: 

RBI has two types’ subsidiaries:

1. Fully OWNED subsidiary.
2. Majority STACK subsidiary.

RBI has two types’ subsidiaries:

It INCLUDES DAILY infusion and absorption of LIQUIDITY on repurchase basis through repo and REVERSE repo USING government security as collateral.

It includes daily infusion and absorption of liquidity on repurchase basis through repo and reverse repo using government security as collateral.

Objectives of SLR:

• To restrict EXPANSION of banks credit.
• To increase banks INVESTMENT in approved securities.
• To ENSURE solvency of banks.

Objectives of SLR:

Fixed DEPOSITS, cash certificates, cumulative and RDs, staff security deposits, deposit HELD as SECURITIES for ADVANCES etc. are time LIABILITIES.

Fixed deposits, cash certificates, cumulative and RDs, staff security deposits, deposit held as securities for advances etc. are time liabilities.

LIQUIDITY Adjustment Facility, Open market operations, Market stabilization SCHEME, repo RATE, reverse repo rate and bank rate the indirect INSTRUMENTS of monetary policy.

Liquidity Adjustment Facility, Open market operations, Market stabilization scheme, repo rate, reverse repo rate and bank rate the indirect instruments of monetary policy.

Cash Reserve Ratio, Statutory Liquidity Ratio and Refinance FACILITIES are the DIRECT instruments of Monetary POLICY.

Cash Reserve Ratio, Statutory Liquidity Ratio and Refinance Facilities are the direct instruments of Monetary Policy.

RBI was NATIONALIZED on 1 JANUARY 1949.

RBI was nationalized on 1 January 1949.

Monetary policy uses the instruments under the CENTRAL bank to REGULATE the availability of cost and use of MONEY and credit. Its goal is achieving the specific economic OBJECTIVES like low and stable inflation and promoting growth.

RBI objectives:

• To maintain the price stability.
• Ensure the FLOW of credit to the productive sector of the economy.
• Support the economic growth.
• Regulate the financial system.

Monetary policy uses the instruments under the central bank to regulate the availability of cost and use of money and credit. Its goal is achieving the specific economic objectives like low and stable inflation and promoting growth.

RBI objectives:

Functions of RBI:

• It formulates implements and monitors the monetary policies.
• It maintains the price stability and ENSURES ADEQUATE flow of credit.
• It protects depositor’s interest and provides cost effective banking SERVICES to the public.
• It manages the Foreign Exchange Management Act, 1999.
• It provides facility to external trade and payment. 
• It issues and exchanges the currency and COIN and DESTROYS too except 1Rs. 
• It acts as bankers for the central and state government banks.

Functions of RBI:

RBI was ESTABLISHED on 1 APRIL 1935 in accordance with the provision of the Reserve Bank of India Act 1934.

RBI was established on 1 April 1935 in accordance with the provision of the Reserve Bank of India Act 1934.