Author : Dr. S. Kanthimathinathan 1
Date of Publication :20th October 2016
Abstract: Evolution of Central Banking is essentially a twentieth century phenomenon as there were only about a dozen Central Banks in the world at the turn of the twentieth century. In contrast, at present there are nearly 160 Central Banks. This is not surprising since the need for Central Banks obviously emerged, as banking became more complex, while becoming an increasingly important part of the economy over time. Firstly, many problems experienced by Banks and their depositors inevitably led to cries for their regulation. Second, Central Banks are essentially a nation’s phenomenon. Third, it is useful to recall some of the reasons for the origin of Central Banks to issue currency to be a banker and lender to the government to regulate and supervise the Banks and Financial entities and to serve as a lender of last resort. The Indian Banking System is headed by the Reserve Bank of India which is the monetary authority of the Country and performs the role of Central Banking which was established in the year 1 st April, 1935 under the RBI act 1934.The Banking system may be classified into the categories of Scheduled Commercial Banks, Non-Scheduled Commercial Banks, Co-operative Banks and Development Banks. The RBI is authorized to carry on and transact several kinds of business as provided in section 17 of the RBI act 1934.As per section 22 of the act, no company shall carry on Banking business in India unless it holds a license issued in that behalf by the RBI and any such license may be issued subject to such conditions as the RBI may think fit to impose. According to Section 23 of the Act, no Banking Company shall open a new place of business in India or change otherwise than within the same city, town or village, the location of an existing place of business situated in India without obtaining the prior permission of the RBI. RBI is playing an important role in the growth of Indian Economy as well as which is treated as the spinal guard of the Indian financial system. In this context a study has undertaken to analyze structure of the management, functions and developmental activities are performing by RBI in recent years.
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