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.

DEVELOPMENTAL FUNCTIONS OF RBI

1. Development of the Financial System

The financial systems includes - financial institutions, financial markets and financial instruments. The sound and efficient financial system is necessary for rapid economic development of the nation. RBI encourages the banking and non - banking institution for maintenance of sound and healthy financial system.

2. Development of Agriculture

As we know, India is an agrarian economy so RBI always give attention to agriculture sector by assessing credit needs of this sector. Regional Rural Banks (RRB), National Bank for Agriculture and Rural Development (NABARD) which are only for

agriculture finance comes under the control of the RBI.

3. Industrial Finance

For economic development of country, Industrial development is necessary. As we know industries includes small industries, middle industries, large scale industries etc all these industries development is necessary for overall economic development of

country. For this purpose RBI supports the industrial sector also. RBI had played the vital role for setting up of such industrial finance institutions like ICICI Limited, IDBI, SIDBI, EXIM etc.

4. Training Provision

RBI always tried to provide essential training to the staff of the banking industry. RBI has set up banker's training college at several places. The training institute namely National Institute of Bank Management (NIBM), Bankers Staff College (BSC), College of Agriculture Banking (CAB) etc.

5. Data Collection

RBI always collects important statistical data on several topics such as interest rates, inflation, savings, investment, deflation etc. This data is very much useful for policy makers and researchers.

Traditional Functions of RBI

1. Issue of Currency Notes

As per the provisions of the Section 22 of the Reserve Bank of India Act 1934 the RBI has sole right or authority to issue currency notes except one rupee note and coins of smaller denomination. RBI can exchange these currency notes for other denominations. RBI issues these currency notes ( 2, 5, 10, 20, 50, 100, 500, 1000)

against the security of gold bullion, foreign securities, rupee coins, exchange bills, promissory notes and government of India bonds etc.

2. Banker to other Banks

RBI also guide, help and direct other commercial banks in the country.RBI can control the volume of bank reserves. Every commercial bank has to maintain a part of their reserves with Its parent (RBI). If bank need fund they approach to RBI for fund,

that is calledLender of the Last Resort.

3. Banter to The Government

RBI works as an agent of the central and stat e governments. On the behalf of government it makes payments, taxes and deposits etc. It also represent the government at international level also. It maintains government accounts and provide financial advice to the government. It also manages government public debts and maintains foreign exchange reserves on behalf of the government. RBI also provides overdraft facility to the government in case of financial shortage.

4. Exchange Rate Management

For maintenance of the external value of rupee, RBI prepares domestic policies. Also it need to prepare and implement the foreign exchange rate policy which will help in attaining the exchange rate stability. For maintenance of exchange rate stability it has to bring demand and supply of foreign currency (U.S.) dollar close to each other.

What CBS offers to a customer?

It offers invariably all information that a bank's customer would need if he/she visits a bank branch in person.

These are as herein follows:-

1. To make enquiries about the balance or debit or credit entries in the account.

2. To obtain cash payment out of his account by tendering a cheque.

3. To deposit a cheque for credit into his account.

4. To deposit cash into the account.

5. To deposit cheques / cash into account of some other person who has account in a CBS branch.

6. To get statement of account.

7. To transfer funds from his account to some other account – his own or of third party, provided both accounts are in CBS branches.

8. To obtain Demand Drafts or Banker’s Cheques from any branch on CBS – amount shall be online debited to his account.

9. Customers can continue to use ATMs and other Delivery Channels, which are also interfaced with CBS platform.

Top CBS Application Software Providers

1-Infosys Technologies Ltd. Finnacle is the universal banking solution from Infosys.

2-I-flex solutions Ltd. since late 2005 it is owned by Oracle

3-TCS FNS (Financial Network Services Limited) is an Australian developer and

supplier of banking application software, operating in world markets. Now owned and

managed by TCS.

Thus, CBS is a step towards enhancing customer convenience through anywhere and anytime banking.