SUPERVISORY FUNCTIONS

1. Granting Licence to Banks

RBI grants licence to banks for carrying its business. RBI also provide licence for opening extension counters, new branches even to close down existing branches.

2. Bank Inspection

RBI has power to ask for periodical information from banks on various components of assets and liabilities.

3. Control Over NBFIs

The non - bank financial institutions are not influenced by the working of a monitory policy. RBI has a right to issue directives to the NBFIs from time to time regarding their functioning. Through periodic inspection, it can control the NBFIs.

4. Implementation of Deposit Insurance Scheme

The RBI has set up the Deposit Insurance Guarantee Corporation in order to protect the deposit of small depositors. All bank deposits below Rs. 1 Lakh are insured with this corporation. The RBI work to implement the Deposit Insurance Scheme in case of a bank failure.

BANKING OMBUDSMAN

 The Banking Ombudsman Scheme was introduced under Section 35 A of the

Banking Regulation Act, 1949 by RBI with effect from 1995.

 The Banking Ombudsman Scheme was first introduced in India in 1995 and it was revised in 2002.

 Current Banking Ombudsman Scheme introduced in 2006.

 From 2002 until 2006, around 36,000 complaints have been dealt by the Banking Ombudsmen.

 Banking Ombudsman is appointed by Reserve Bank of India.

 Banking Ombudsman is a senior official appointed by RBI. He handle and redress customer complaints against deficiency in certain banking services.

 The offices of Banking Ombudsman is mostly situated at State Capitals.

 Around 15 Banking Ombudsmen have been appointed.

 All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co - operative Banks are covered under the Banking Ombudsman Scheme.