The Customer Service Department was renamed as Consumer Education and Protection Department (CEPD) in November 2014 and acts as the single nodal point for receipt and disposal of all external complaints on deficiency of services provided by the Reserve Bank of India and the reserve Bank-regulated entities. Apart from complaint redress, CEPD will also act as the nodal department for enforcing ethical behaviour by the financial services providers under the regulatory purview of the Reserve Bank. It will also create consumer awareness and educate the public on banking and financial services.
- Dissemination of instructions/information relating to customer service and grievance redress by banks and the Reserve Bank of India
- Overseeing the grievance redress mechanism in respect of services rendered by various offices/departments of the Reserve Bank
- Administering the Banking Ombudsman Scheme
- Acting as a nodal department for the Banking Codes and Standards Board of India (BCSBI)
- Ensuring redress of complaints about deficiencies in customer service in banks received directly and through CPGRAMS - Portal of Government of India.
- Liaison between banks, Indian Banks’ Association, BCSBI, offices of Banking Ombudsmen and regulatory departments of the Reserve Bank on matters relating to customer services and grievance redress and providing policy inputs to regulatory departments of the Reserve Bank, IBA and BCSBI in this regard.
- Compile and publish Annual Report of the Banking Ombudsman Scheme, 2006
- Formulation of Bank’s budget and monitoring thereof; Expenditure Rules
- Corporate Strategy – Monitoring of Implementation
- Formulate Business Continuity Policy and implement BCM throughout the Bank
- Management of Superannuation Funds, actuarial valuation of liabilities annually
- Work related to (i) Opening of offices & departments and
(ii) Institutes funded by the Bank
The Department of Banking Regulation exercises regulatory powers in respect of commercial banks, Local Area Banks (LABs) and Regional Rural Banks (RRBs) as per the provisions contained in the Banking Regulation Act, 1949, the Reserve Bank of India Act, 1934, the Regional Rural Banks Act, 1975 and other related statutes.
In particular, it looks after
- licensing, branch expansion and maintenance of statutory reserves, management and methods of operations, amalgamation, reconstruction and liquidation of banking companies.
- regulatory oversight of select All India Financial institutions, such as, Exim Bank, Industrial Investment Bank of India (IIBI), National Bank for Agriculture and Rural Development (NABARD), National Housing Bank (NHB) and Small Industries Development Bank of India (SIDBI) and administration of the Credit Information (Regulation) Act, 2005 and regulation of credit information companies.
- approval for setting up of subsidiaries and undertaking of new activities by commercial banks as also the regulatory functions relating to financial institutions (FIs).
- promoting and fostering a sound, multi-faceted and competitive financial system by laying down norms for prudential regulation of commercial banks/FIs.
- creating pro-active environment for development of new products
- keeping itself abreast of developments domestically and globally and formulating policy responses by suggesting amendments to the existing laws/enactment of new legislation, regulation, etc.
- striving to bring the regulatory standards of commercial banks/FIs on par with the international best practices.
The origin of the Department of Communication could be traced to the Division of Publications and Press Relations in the then Economics Department way back in 1960’s. Recognising the widening range of functions of the Reserve Bank and its associate institutions and the need for effective publicity and public relations, the office of the Press Relations Officer was converted into a full-fledged Press Relations Section in the seventies. The Division was, in March 2007, given the status of a full-fledged department and was renamed Department of Communication (DoC).
In 2008, the Reserve Bank of India for the first time, elaborated its communication policy which was placed on the RBI website with the approval of the Reserve Bank's Central Board of Directors.
The varied publications of the Reserve Bank are the mainstay of the Reserve Bank’s dissemination policy. Apart from the publications, speeches of the Governor and Deputy Governors provide rationale and explanations behind the policy decisions. Informal discussions with financial editors are also arranged every two months to keep open an informal channel of communication between the media and the Reserve Bank.
Dissemination of information in the Reserve Bank is centralised. The present communication channels used by DoC for dissemination of information are:
- Press releases, press summaries of reports and publications, speeches of Governor/Deputy Governors and rejoinders;
- Press conferences, economic editors’ conferences and media briefings;
- Meetings/interviews of press persons with the Reserve Bank officials;
- Learning sessions for media
As a 360-degree communication process, the Reserve Bank actively seeks feedback from stakeholders on regulations through its website. Department of Communication also monitors reports appearing in the newspapers, journals and news agencies and television and prepares a daily news summary of important news items in national media.
The Department of Co-operative Banking Regulation (DCBR) regulates State Co-operative Banks (StCBs), District Central Co-operative Banks (DCCBs) and Primary Cooperative Banks, popularly known as Urban Cooperative Banks (UCBs).
UCBs are primarily registered as cooperative societies under the provisions of either the State Cooperative Societies Act of the State concerned or the Multi State Cooperative Societies Act, 2002. StCBs/DCCBs, which are part of short-term co-operative credit structure, are registered under the provisions of State Cooperative Societies Act of the State concerned. Since March 1, 1966 the banking laws were applied to cooperatives societies. Since then there is duality of control over StCBs/DCCBs/UCBs between the RCS/CRCS and the Reserve Bank of India.
The Reserve Bank thus regulates the banking functions of StCBs/DCCBs/UCBs under the provisions of sections 22 and 23 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies (AACS )); whereas RCS/CRCS looks after incorporation, registration, management, recovery, audit, supersession of Board of Directors and liquidation. DCBR functions in close coordination with other regulators, namely, Registrar of Cooperative Societies (RCS) and Central Registrar of Cooperative Societies (CRCS). In addition to regulatory functions, the Department also carries out developmental functions for StCBs /DCCBs / UCBs.
- To issue licence to UCBs/StCBs/DCCBs to carry on banking business
- To grant approval to UCBs/StCBs for inclusion in the Second Schedule of Reserve Bank Act, 1934
- To authorise UCBs/StCBs to open branches. In terms of section 23 1(b) of Banking Regulation Act, 1949 (AACS), DCCBs are exempted from the requirement of obtaining licence from the Reserve Bank for opening branches/places of business
- To grant permission for extension of area of operations of UCBs
- To prescribe prudential norms for sound functioning of UCBs/StCBs/DCCBs
- To issue directions and operational instructions to StCBs/DCCBs/UCBs, wherever necessary to streamline their functioning and to protect the interests of the depositors4
- To impose penalty under section 47 of the Banking Regulation Act, 1949 (AACS)
- To prescribe various periodical returns to be submitted by StCBs/DCCBs/UCBs
- To cancel the licence of an StCB/DCCB/UCB, if it does not fulfil any of the conditions of licence
- To impart training to the officials of UCBs/StCBs/DCCBs to upscale their knowledge, skill and expertise as part of developmental functions
The Reserve Bank has entered into memorandum of understanding (MOU) with Central Government and various State Governments for harmonisation of regulation and supervision.
Department of Co-operative Bank Supervision is entrusted with the task of supervising Urban Co-operative Banks (UCBs) as per the Banking Regulation Act, 1949, Reserve Bank of India Act, 1934 and Reserve Bank of India’s prescribed guidelines. With effect from March 1, 1966, UCBs have been brought under the ambit of the provisions of the Banking Regulation Act, 1949 as the growing presence of co-operatives in the system necessitated better and efficient monitoring. However, co-operation being a state mandate, UCBs are also regulated by Central Registrar of Co-operative Societies (CRCS)/Registrars of Co-operative Societies (RCS). The areas that are handled by the State/Central Government through the RCSs/CRCS are registration, management, administration, recovery, audit, supersession of Board of Directors and liquidation of UCBs.
The Reserve Bank of India prescribes prudential norms for capital adequacy, income recognition, asset classification and provisioning, loans and advances, investments and liquidity requirements. Further, guidelines have also been given to UCBs in respect of single/group exposure norms and sectoral exposures. UCBs are required, by virtue of the provisions of section 35 A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies), to comply with these directions.
DCBS is broadly given the mandate of on-site and off-site supervision through its various Regional Offices. They monitor compliance of UCBs with the guidelines/directives issued by the Reserve Bank. The on-site supervision is carried out by way of inspections conducted under section 35 of the Banking Regulation Act, 1949 (AACS). Inspection report of each inspected bank is generated and depending on the findings, compliance is called for from the bank to rectify the violation/irregularity observed. The findings of the inspections are presented to various committees/boards, such as, Board for Financial Supervision at central level and Local Boards, National Federation of Urban Co-operative Banks (NAFCUB) at local level.
UCBs file a set of statutory/other returns with the Reserve Bank through a dedicated software package, Off-site Surveillance System. These returns help the Reserve Bank in off-site monitoring of the financial position of banks.
Based on the current assessment of the financial position of a UCB, the department initiates supervisory actions, if need be, by advising the individual UCB of the specific action under Supervisory Action Framework proposed to be taken and the corrective action it needs to take to improve the financial position.
The Reserve Bank also issues directions and operational instructions to UCBs, wherever necessary to streamline the functioning of these banks and to protect the interests of the depositors. Powers have also been vested with the Reserve Bank under section 47 of the Banking Regulation Act, 1949 for imposition of penalty.
Apart from supervisory functions, the department also processes applications received from UCBs, in co-ordination with other departments of the Reserve Bank, for extension of various facilities, such as, conducting foreign exchange business by obtaining AD Category I licence from the Reserve Bank, mobile banking, internet banking, opening of currency chest, etc.
The Reserve Bank has also entered into Memorandum of Understanding with State Governments, Union Territories and Central Government (for multi-state UCBs) to set up a Task Force on Urban Co-operative Banks (TAFCUB) in each State/UT to identify and draw up a time-bound action plan for the revival of potentially viable UCBs and non-disruptive exit for non-viable UCBs.
The Regional Offices of the Reserve Bank act as focal points for monitoring upgradation of skill for the staff of co-operative banks, improvements in their training programmes and linking and integrating them with the country's banking system.
Created as part of institutional reorganisation undertaken in November 2014, the focus of Department of Corporate Services will be on coordinating and facilitating delivery of certain internal corporate services so that specialised departments can focus on their core functions. It will, thus, look after:
- Protocol Services to top management
- Coordinating management of events, seminars, meetings and providing hospitality to visiting dignitaries
- Providing other support services, such as, framing guidelines for award of contracts/floatation of tenders for printing, pricing, sales and distribution of publications and centralised procurement/arrangement of various stationery items, courier services, etc.
- Coordinating with Department of Information Technology, Human Resources Management Department and other user departments for Electronic Documentation Management System of the Reserve Bank including framing guidelines for preservation of documents.
- The Department of Economic and Policy Research undertakes policy supportive research under a structured research agenda on macroeconomic issues specifically in the areas of monetary policy, financial markets, forecasting of macroeconomic variables, financial stability, and external sector management.
- The primary statistics on monetary aggregates, balance of payments and external debt, flow-of-funds, financial savings and state finances are compiled in the Department, which are disseminated by the Reserve Bank through print and electronic media.
- The Department is responsible for publishing the statutory Annual Report of the Reserve Bank. The History of the Reserve Bank is also published by the Department. Other regular publications of the Reserve Bank brought out by the Department include State Finances: A Study of Budgets of State Governments, RBI Monthly Bulletin and Weekly Statistical Supplement.
- The Department supports and encourages research environment in the country through its Research Chairs, Fellowships and sponsoring of research projects and studies.
- It also organises two lectures in the memory of two of its past Governors, namely, Shri C.D. Deshmukh and Shri L.K. Jha.
- Investment and management of the foreign currency and gold assets of the Reserve Bank of India,
- Handling external transactions on behalf of Government of India (GOI) including transactions relating to International Monetary Fund (IMF)
- All policy matters incidental to India's membership of the Asian Clearing Union, and
- Other matters relating to gold policy, membership of the Bank for International Settlements (BIS) and bilateral banking arrangements between India and other countries like Russia, bilateral and South Asian Association for Regional Cooperation(SAARC) currency swap arrangements
The Department of Government and Bank Accounts (DGBA) discharges the core central banking function of acting as banker to the government and banker to banks.
More specifically, it:
- maintains principal deposit accounts of Central and State Governments at Central Accounts Section of the Reserve Bank of India, Nagpur
- grants ways and means advances to Central and State Governments
- Carries out day to day operations by agency bank branches (authorised for this purpose) and Banking Departments at Regional Offices.
- frames the accounting policy of the Reserve Bank
- finalises the weekly statement of accounts of the Issue and Banking Departments and the annual balance sheet of the Reserve Bank
- attends to matters relating to government business, such as appointment of agency banks, paying them commission and overseeing their conducting of government business. Much of this is done in consultation with the government
In its capacity as banker to banks, the Reserve Bank:
- opens current accounts of banks with itself, enabling them to maintain statutorily prescribed cash reserves as well as to carry out inter-bank transactions
- effects interbank clearing settlements through these current accounts
The Department of Government and Bank Accounts (DGBA) also functions as the central office of the Banking Departments at Regional Offices.
Department of Non-Banking Regulation (DNBR) works towards promoting and fostering a robust and sound non-banking financial sector by laying down appropriate regulations including prudential regulations and business conduct regulations for Non-Banking Financial Companies (NBFCs) (including Mortgage Guarantee Companies(MGCs) and Securitisation Companies and Reconstruction Companies (SC/RCs).
- To frame policies for regulation and supervision of NBFCs (including (MGCs) and SC/RCs,
- Issuance and cancellation, if required, of Certificate of Registration (CoR) to NBFCs (including (MGCs) and SC/RCs),
- Consultation and co-ordination with other departments of the Reserve Bank, other finance sector regulators, industry and various other stakeholders including Centre and State Governments in policy and other related matters,
- Administration of the provisions of the Reserve Bank of India Act, 1934 relating to NBFCs, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,
- Advising State Governments, as and when required, on rules to be notified under Chit Funds Act, 1982, the Prize Chit and Money Circulation Schemes (Banning) Act, 1978 and on issues related to the functions discharged by DNBR.
The Department of Non-Banking Supervision (DNBS) is entrusted with the responsibility of supervision of Non-Banking Financial Companies (NBFCs) under the provisions contained under Chapter III B and C and Chapter V of the Reserve Bank of India Act, 1934main focus of the department is on a) depositor protection, b) consumer protection and c) financial stability. The supervisory framework of the Reserve Bank provides for surveillance of the sector through off-site monitoring and on-site inspection.
- To ensure compliance with the provisions of the Reserve Bank of India Act, 1934 relating to NBFCs, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Factoring Regulation Act, 2011.
- To supervise regulated entities through on-site inspections and off-site monitoring.
- To ensure adherence by NBFCs to the policies laid down by the Department of Non-Banking Regulation (DNBR) with the help of the respective Regional Offices (ROs).
- To act as a secretariat to the State Level Coordination Committee (SLCC) and to ensure better inter regulatory co-ordination through the SLCC mechanism to curb unauthorised non-banking financial activities.
- To conduct public awareness programmes, depositors' education and to conduct workshops / seminars for trade and industry organisations.
The Department of Payment and Settlement Systems (DPSS), as a separate department of the Reserve Bank, came into existence in March 2005.
The functions of the Department include:
- Policy formulation in respect of payment and settlement systems
- Authorisation of payment and settlement systems/operators
- Regulation of payment and settlement systems
- Supervision and monitoring of payment and settlement systems
- Laying down standards for payment and settlement systems
- Designing, developing and integrating payment system projects of national importance and / or facilitating such implementation
- Implementation of the international principles relating to payment systems as enunciated by the Bank for International Settlements
The department has four Regional Offices at Chennai, Kolkata, Mumbai and New Delhi.
Board for Regulation and Supervision of Payment and Settlement Systems
The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) prescribes policies relating to the regulation and supervision of all types of payment and settlement systems. The BPSS also provides guidance on setting standards for existing as well as future payment systems, authorising the payment and settlement systems/operators, determine criteria for membership to these systems, including continuation, termination and rejection of membership. BPSS meets once every quarter.
The payment and settlement systems in India are regulated under the Payment and Settlement Systems Act, 2007 (PSS Act). The PSS Act as well as the Payment and Settlement System Regulations, 2008 framed under the Act came into effect from August 12, 2008. In terms of the PSS Act, no person other than the Reserve Bank of India (RBI) can commence or operate a payment system in India unless authorised by the Reserve Bank.
Payment and settlement systems in India includes cheque based clearing systems, Electronic Clearing Service (ECS) suite, National Electronic Funds Transfer (NEFT) System, electronic payments using debit and credit cards, prepaid payment instruments, mobile banking, internet banking, etc. While Real Time Gross Settlement Systems (RTGS) and Clearing Corporation of India Ltd. (CCIL) constitute financial market infrastructure, National Payments Corporation of India (NPCI) is the umbrella organisation for retail payments.
- Collection, processing and analysis of data on banking, corporate and external sectors.
- Planning, designing and organising quick sample surveys regularly for area of interest to the Reserve Bank.
- Maintaining the Reserve Bank’s Data Warehouse and disseminating data/information.
- Modelling and forecasting of important macro-economic indicators.
- Development of methodology for the measurement and estimation of variables and improvement of the database of various sectors of the economy through participation in committees, working groups, etc.
- Providing technical support to other departments of the Reserve Bank in statistical analysis in specific areas and undertaking studies in the areas of interest to the Reserve Bank.
- Building a technology-driven centralised information management of receipt, processing, production, storage and retrieval of data and its dissemination system based on data warehousing approach. The system provides the decision-makers, analysts and researchers, online and real-time access to a central repository of clean and consistent historical and current data.
- Standardisation in reporting of financial data under XBRL, which is being integrated with the data warehouse, and is envisaged to be the only platform for receiving and validating the incoming data in due course.
- Developing a statistical system for maintaining data quality.
- Bringing out Reserve Bank’s data publications directly from the data warehouse.
- Undertaking forward-looking surveys on macroeconomic changes and expectations for monetary policy formulation. Conducting other periodic surveys to fill data gaps on relevant indicators, e.g., housing, employment placement for fresh graduates, etc.
- Improving the coverage of studies relating to finances of private corporate sector of the economy.
- Generation of forecasts of macroeconomic variables and related empirical work, including developing a quarterly macro-econometric model for forecasts and policy simulation.
- Undertaking analytical studies using of various statistical, econometric and operational research techniques which are relevant for the Reserve Bank.
Financial inclusion and development role of the Reserve Bank envisages formulating policies to make credit available to productive sectors of the economy including rural and Micro, Small and Medium Enterprises (MSME) sectors. Promoting financial education and financial literacy are the current focus of the function and encapsulates the renewed national focus on Financial Inclusion. The functions of the Department in brief are:
- To formulate macro policy to strengthen credit flow to the priority sectors
- To ensure that priority sector lending becomes a tool for banks to capture untapped business opportunities among financially excluded sections of the society
- To help expand Prime Minister’s Jan Dhan Yojana (PMJDY) and to make it a sustainable and scalable financial inclusion initiative through financial literacy
- To step up credit flow to MSME sector and to rehabilitate sick units through timely credit support
- To strengthen institutional arrangement, such as, state level bankers committee and Lead Bank Scheme to facilitate these objectives
Carved out of the Financial Markets Department in November 2014, the Financial Markets Operation Department (FMOD) has been entrusted with the responsibility of carrying out market operations towards implementing the Reserve Bank’s monetary policy objectives. The Department, on behalf of the Reserve Bank, conducts operations in the money, government securities and forex markets. As a part of this responsibility, the FMOD also undertakes analysis of various market segments and provides inputs to the top management for informed decision making.
The specific functions of FMOD include:
- Domestic forex market operations (Spot, Forwards and Swaps)
- Liquidity Adjustment Facility (LAF) operations (Repo, Reverse repo, Marginal Standing Facility) including Open Market Operations (Outright sale/purchase of gilts) under liquidity management framework revised in August 2014
- Special Market Operations (SMO) for specific purposes
- Computation and dissemination of the Reserve Bank's Rupee Reference Rate
- Computation of Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER)
- Issuance and buyback of dated securities under Market Stabilisation Scheme (MSS)
- Analysis of market developments
- Carrying out market oriented research and analysis
- Estimation of liquidity requirement in the banking system
- Providing secretarial assistance to the Financial Markets Committee (FMC) of the Reserve Bank
- Coordinating meetings of Early Warning Group (EWG) comprising financial sector regulators and Ministry of Finance
In addition, the FMOD also attends to policy issues relating to various segments of financial markets, fixation of Intra-Day Limits (IDL) limits for operation of Real Time Gross Settlement Accounts and attending to references received from other departments of the Reserve Bank, international and other regulatory organisations.
The Financial Markets Regulation Department (FMRD) has been set up on November 3, 2014 with a mandate to regulate, develop and oversee financial markets. The primary activities of the department include:
- Regulation and development of the money, government securities, foreign exchange markets and related derivative markets;
- Regulation and supervision of financial benchmarks for interest rates and foreign exchange markets;
- Development work related to financial market infrastructure for the money, government securities, foreign exchange markets and related derivative markets, including trade repository for over-the-counter(OTC) derivative transactions;
- Oversight / surveillance of the money, government securities, foreign exchange markets and related derivative markets; and
- Secretarial support to the Technical Advisory Committee on Money, Government Securities and Foreign Exchange Markets and RBI-SEBI Technical Committee on Interest Rate and Currency Futures.
In addition, a Market Intelligence Cell is proposed to be set up as part of FMRD.
Keeping in view both international and domestic initiatives for resolving financial crisis and strengthening international financial architecture, the Financial Stability Unit (FSU) was set up in July 2009. The main functions of FSU are:
- Conduct of macro-prudential surveillance of the financial system on an ongoing basis
- Preparation of financial stability reports
- Development of a database of key variables which could impact financial stability, in co-ordination with the supervisory wings of the Reserve Bank
- Development of a time series of a core set of financial indicators
- Conduct of systemic stress tests to assess resilience and
- Development of models for assessing financial stability
Following the formation of the Financial Stability and Development Council (FSDC), FSU provides the Secretariat to the Sub-Committee of the FSDC which is headed by the Governor. Executive Director (in charge of FSU) acts as the Member-Secretary of the FSDC Sub-Committee.
The Foreign Exchange Regulation Act, 1973 (FERA) was repealed and a new Act called the Foreign Exchange Management Act, 1999 (FEMA) came into force with effect from June 1, 2000. The objective of the new dispensation is to facilitate external trade and payments and promote orderly development and smooth conduct of foreign exchange market in India.
Facilitator of Forex Transactions
Since the procedures have been simplified and powers have been delegated to the Authorised Persons under the FEMA, 1999, the role of the Foreign Exchange Department is minimum so far as individual citizens are concerned. Persons resident in India have to simply approach the Authorised Persons for their foreign exchange needs. Guided by the Current Account Rules notified, from time to time by the Government of India and Capital Account Regulations notified by the Reserve Bank, the Authorised Persons will facilitate foreign exchange transactions of individuals. The Reserve Bank processes only those applications which require its prior approval under Foreign Exchange Management (Current Account Transactions) Rules and (Capital Account Transactions) Regulations.
Compounding of FEMA Contraventions
In keeping with the spirit of the FEMA, the Government of India has empowered the Reserve Bank under section 15 of the Act to compound the contraventions of all sections of FEMA, 1999 except section 3(a) of the Act. Under compounding the contravener has the option of voluntarily admitting to the contravention, pleading guilty and seeking redressal. The process provides comfort to individuals and corporates that have inadvertently contravened FEMA while taking serious view of wilful, mala fide and fraudulent transactions.
Human Resource Management Department (HRMD) essentially facilitates the Reserve Bank's central banking activities by (i) creating an enabling environment to enhance the efficiency of the organisation (ii) drawing out from the staff the very best by a system of proper placements, incentives, and (iii) creating an atmosphere of trust, a certain security of expectations and a feeling that the organisation cares about the well being and personal aspirations of the staff. This helps align personal aspirations of the staff with professional goals and helps enhance efficiency in the organisation.
Specifically, the functions of HRMD are:
a) To evolve and implement policies for:
- Promotions and career progression
- Performance and potentiality appraisal
- Training, development and skill upgradation
- Mobility (Transfers and Rotation)
- Reward and motivation
- Retirement/voluntary vacations
- Wage structure and other facilities
- Deputation/Secondment/Tour of duty
b) To generally administer discipline management system in the Reserve Bank
c) To disseminate information under the Right to Information Act, 2005 with a view to promoting transparency and accountability in the Reserve Bank's operations
d) To maintain up-to-date database on human resources in the Reserve Bank
e) To maintain harmonious industrial relations and to conduct negotiations with various recognised bodies of different categories of staff on matters like pay scales and allowances, welfare schemes, personnel policies, etc.
f) To continuously review the appraisal system in order to make it an effective tool for HRD policy management
g) To design career and succession plan
h) To oversee the Reserve Bank’s training establishments (namely, Reserve Bank Staff College, Chennai and College of Agricultural Banking, Pune besides Zonal Training Centres at Chennai, Kolkata, Mumbai and New Delhi) and revitalise training functions
i) To administer Staff Suggestion Scheme
j) To oversee Summer Placement
k) To publish the Reserve Bank's house journal ‘WITHOUT RESERVE’ and to conduct RBI Quiz.
l) To act as Secretariat to Human Resource Management Sub-Committee of the Central Board.
m) To oversee matters pertaining to Prevention of Sexual Harassment of women at work place including secretarial assistance to Central Complaints Committee.
Inspection Department was set up in 1935 when the Reserve Bank of India commenced its operations. The Department is tasked with the mandate of providing an independent and objective assurance/feedback on the operations/working of the offices of the Reserve Bank. It examines/evaluates and reports on the adequacy and reliability of the Reserve Bank's risk management, internal controls and governance process.
The Inspection Department is the Secretariat and also reports its assessments to the Audit and Risk Management Sub-Committee (ARMS) of the Central Board of the Reserve Bank. Additionally, it places the findings of Information Systems (IS) audits before the Information Technology Sub Committee (ITSC) of the Board. Audit observations which have been classified as High Risk are also placed before the Executive Directors’ Committee (EDC) for their review and guidance. The Internal Audit function constitutes a key dimension in the Reserve Bank's governance architecture.
Streams of Inspection in the Reserve Bank
Presently, the following types of inspections are carried out/co-ordinated by the Department.
- Risk Based Internal Audit (RBIA)
- Information Systems Audit
- Concurrent Audit (CA)
- Control Self-Assessment Audit (CSAA)
Risk Based Internal Audit (RBIA)
Under the Risk Based Internal Audit (RBIA), the Inspection Department provides independent and objective opinion to the management on whether or not the Reserve Bank's business processes and risks are being properly managed. The RBIA reviews the outcomes of all other audits. Audit of various business units Central Office Departments (CODs), Regional Offices (ROs), Training Establishments (TEs), Banking Ombudsman Offices (BO) and Associate Institutions (AIs) are taken up at different periodicities ranging from 12 to 24 months.
Information System Audit (ISA)
Information Security (IS) audit is carried out as part of the RBIA framework to evaluate risk control measures in Information Systems used in the Reserve Bank. The Department also carries out technology audit of computer applications/systems, technology platforms, services, etc. These are carried out either at the directions of Central Board/Audit and Risk Management Sub-Committee (ARMS)/Information Technology Sub-Committee (ITSC)/Top Management or on receipt of request from the Business Owner Departments/User Departments/Department of Information Technology (DIT) or as felt necessary by the Department considering the criticality/importance of operations/systems.
Concurrent Audit (CA)
As a part of internal control mechanism, all the business units are required to get their transactions (mainly financial transactions) audited by external chartered accountant firms, concurrently with the occurrence of such transactions.
Control Self-Assessment Audit (CSAA)
This is a self-assessment/health check-up exercise to assess gaps in risk controls so that timely reviews are made and corrective action taken/initiated to address the gaps. The assessments are carried out by persons unconnected with the operations/process being assessed. All business units are required to conduct CSAA at least twice in a year, that is, for the half-year ended June and December every year.
Compliance, Follow-up and Reporting
Inspection Department follows up on the audit observations (RBIA, ISA/ TA, CA, CSAA) to ensure that prompt corrective actions or risk mitigating counter-measures are instituted. The Department undertakes off-site monitoring as well as on-site evaluation, wherever necessary. Off-site monitoring is undertaken by obtaining periodical returns from business units, analysing them and initiating follow-up as deemed appropriate.
ARMS & EDC Meetings
The Department co-ordinates and arranges periodical meetings of Audit & Risk Management Sub Committee (ARMS) and Executive Directors' Committee (EDC). The meetings of ARMS and EDs' Committee are conducted approximately once in three months. On half yearly basis, the Department reports to Information Technology Sub-Committee (ITSC) of the Board on Information Systems (including Security) audits undertaken by the Department.
The main activities of the Internal Debt Management Department include:
- Managing the Government’s debt in a risk efficient and cost effective manner;
- Providing innovative and practical solutions for government’s debt management;
- Building a robust institutional framework of primary dealers (PDs).
Specific functions of the Department include:
(i) Government Borrowing: To manage market borrowing programmes of the Government of India (including preparing an issuance calendar in consultation with the Government of India), all State Governments and the Union Territory of Puducherry. The function involves choosing the instrument and tenor, manage the auctioning process and monitoring State and Central cash balances.
(ii) Dealing Operations: To interface with the Government securities market for purchasing securities from the secondary market for investment purposes by State Governments under schemes like CSF & GRF and on behalf of foreign central banks. It also monitors movement of yields of Government securities, among other things, and provides necessary feedback to Top Management. It carries out monthly and quarterly analysis of the Government Securities - Secondary market.
(iii) Primary Dealers: To enter into agreements with PDs, monitor and review their performance with regard to underwriting and bidding commitments in primary markets, conduct underwriting auctions and supervise standalone PDs.
(iv) Research: To provide policy, analytical and technical inputs for various committees and conferences including State Finance Secretaries conference. To also act as the focal point for answering parliamentary questions, queries of the Central Board and Committee of Central Board of the Reserve Bank, research contributions to the Reserve Bank’s, Government of India’s and other publications.
(v) Management Information Systems (MIS): To monitor the data pertaining to Government cash balances, maintains the MIS for the Top Management, provide data for various statutory and internal publications, oversee the technology platform for Government securities auction activities and undertake analysis. Also to undertake the assessment and short term projections of Government cash balances primarily for liquidity management purposes of the Reserve Bank.
(vi) Central Debt: To maintain accounting/reporting of public debt management functions. These include formulation of policy and monitoring of Public Debt Offices, which act as depositories of Government securities, as also to maintain and service public debt, administration of Government Securities Act, 2006/Rules 2007 and also Public Debt Act, 1944/ Rules 1947 wherever applicable.
International Department was constituted in the Reserve Bank on November 3, 2014 to augment the focus on international financial diplomacy and participation in formulation of global regulatory standards. The Department is responsible for participation in international fora and for supporting the top Management’s interactions in this area, as also to facilitate their involvement of the institution in international economic cooperation. It has a research orientation towards framing the Reserve Bank’s stance on issues in this sphere. The Department is also responsible for the Reserve Bank’s external services and relations including on matters of technical cooperation with other central banks.
This department mainly looks after:
- The Reserve Bank’s relations with international institutions/country groupings, such as, International Monetary Fund(IMF), Bank for International Settlements(BIS), Financial Stability Board(FSB), G20, Brazil, Russia, India, China and South Africa (BRICS), South Asian Association for Regional Cooperation Finance(SAARCFINANCE), Committee on Payments and Market Infrastructures (CPMI), Committee on the Global Financial System(CGFS), World Bank, World Trade Organization(WTO), Asian Development Bank (ADB), etc.
- Framing the Reserve Bank’s views on issues of policy relevance in international economic cooperation, including those on regulatory issues and central bank currency swaps, etc.
- The Reserve Bank’s initiatives at capacity building for officials of other central banks and managing exposure visits for delegates of foreign institutions/market participants/universities, etc.
- Preparing research notes on current issues in international economic cooperation.
The primary responsibilities of the Legal Department are:
- Providing legal advice to the top management, departments, regional offices and subsidiaries of the Reserve Bank.
- Managing litigation on behalf of the Reserve Bank and the Deposit Insurance and Credit Guarantee Corporation (DICGC).
- Vetting of circulars, directions, regulations and agreements for the various departments of the Reserve Bank. Assisting drafting of legislation to be administered by the Reserve Bank.
- Acting as a Secretariat to the First Appellate Authority of the Reserve Bank under the Right to Information Act, 2005.
- Appearing on behalf of the Reserve Bank before the Central Information Commission and various judicial forums, such as, District Consumer Disputes Redressal Forum, State Consumer Disputes Redressal Commission, Labour Courts/Industrial Tribunals, etc.
Mandate and Objectives
According to the Reserve Bank of India Act, 1934, “...it is expedient to constitute a Reserve Bank of India to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage".
- The broad objectives of monetary policy are derived from the Reserve Bank of India Act. The agreement on Monetary Policy Framework between the Government and the Reserve Bank of India dated February 20, 2015 states that “the objective of monetary policy is to primarily maintain price stability, while keeping in mind the objective of growth”. The relative emphasis placed on price stability and economic growth is modulated according to the circumstances prevailing at a particular point in time and is spelt out, from time to time, in the policy statements of the Reserve Bank. In the recent period, considerations of financial stability have assumed an added importance in view of increasing openness of the Indian economy.
- The agreement on Monetary Policy Framework also specifies explicitly the target for inflation – as measured by the consumer price index-combined (CPI-C) – in the near to medium-term, i.e., (a) below 6 per cent by January 2016, and (b) 4 per cent (+/-) 2 per cent for the financial year 2016-17 and all subsequent years.
- As per the agreement, the Governor, and in his absence the Deputy Governor in charge of monetary policy, shall determine the policy rate, as well as any other monetary measures, to achieve the inflation target.
- The Reserve Bank has multiple instruments at its command for implementation of monetary policy such as the repo rate; cash reserve ratio (CRR); open market operations, including outright purchase/ sale and repos/ reverse repos (both overnight as well as term); market stabilisation scheme (MSS); special market operations; sector-specific liquidity facilities; and prudential tools.
- Monetary Policy Department is entrusted with the responsibility of assisting the Governor, and in his absence the Deputy Governor in charge of monetary policy, in designing, formulating and implementing monetary policy of the Reserve Bank. Accordingly, the Department prepares Governor's Statements on Monetary Policy.
- The policy statements are bi-monthly since April 1, 2014, i.e., six times in a year. Off-cycle monetary policy actions can also be undertaken depending on the evolving macro-financial conditions.
- Monetary policy formulation is carried out by the Reserve Bank in consultation with various stakeholders, such as, banks, market participants and industry and trade associations.
- Prepares the bi-annual “Monetary Policy Report”.
- Organises meetings of the Technical Advisory Committee on Monetary Policy. In pursuance of the objective of further strengthening the consultative process of monetary policy formulation, a Technical Advisory Committee (TAC) on Monetary Policy has been set up to review macroeconomic and monetary developments and advise the Reserve Bank on the stance of monetary policy.
- Conducts pre-policy consultation meetings with the bankers, market participants, trade bodies, self-regulatory organisations, economists and journalists to facilitate the policy formulation process.
- Coordinates with other Departments of the Reserve Bank for Part-B of Monetary Policy Statement covering developmental and regulatory policies.
- Compiles data on interest rates and sectoral deployment of credit for monitoring monetary policy transmission and assessing the pattern of credit flows, respectively.
- Prepares growth and inflation projections for presentation in the inter-departmental groups and also in the pre-policy monetary policy strategy meetings.
- Prepares forward looking assessment of liquidity conditions in consultation with other Departments.
- Undertakes analysis of global and domestic macroeconomic data. Monitors relevant global developments, including monetary policy developments in major economies.
- Undertakes research on monetary policy related areas.
- Monitors standing liquidity facilities/refinance schemes and proposes/ implements related policy changes.
- Monitors and reviews maintenance of CRR and SLR by scheduled commercial banks.
- Prepares a Memorandum for the Central Board of Directors twice a year reviewing the monetary and credit developments and policy measures taken during the period.
The Premises Department's responsibility is to create and maintain premises- related infrastructure. The Department frames policies and guidelines on physical infrastructure, acquisition, maintenance, consolidation and disposal of office and residential space. It allocates capital budgets to Regional Offices and monitors high- value works/projects of Estate Departments across the country, keeping in mind ecological and environmental concerns.
The current thrust-areas of the Department are as follows:
• Promoting greater environmental consciousness, conserving resources like energy and water and auditing the use of these resources.
• Rationalisation of Bank's properties.
The Risk Monitoring Department (RMD) has been constituted for implementation of Enterprise-wide Risk Management System in the Reserve Bank. The department has two divisions looking after operational risks and financial risks. For effective identification, assessment and management of risks uniformly throughout the Reserve Bank, RMD has been mandated:
- To prepare a broad risk management framework and to formulate and to periodically review the Reserve Bank’s policies/methodologies/matrices and to interact with functional units to ensure that all significant risks are identified.
- To aggregate, monitor and periodically report the risks reported by functional units to the Risk Monitoring Committee (RMC) and Audit and Risk Management Sub-Committee (ARMS).
- To assess and report the financial risks arising out of the Reserve Bank’s policy actions to the RMC and ARMS.
- To create institutional memory by building a database of ‘loss’ and ‘near loss’ events.
- To periodically review the adequacy and appropriateness of the Reserve Bank’s Business Continuity Plans (BCPs) and systems.
- To foster risk management culture in the organisation.
- Secretarial work connected with the meetings of the Central Board and its Committee;
- Secretarial work relating to the Deputy Governors' Committee meetings.
- Secretarial work relating to the Senior Management Committee (SMC) meetings/sideline meetings of the Governor;
- Monitoring implementation/follow up of decisions taken by these committees;
- Work relating to service conditions of the Governor and the Deputy Governors, including their joining/retirement/relinquishing charge;
- Work relating to constitution of Central Board/Local Board;
- Providing administrative support, including IT related, to the top management, including staff support and various non-establishment payments;
- Providing administrative support and making non-establishment payments on behalf of Secretary's Department, Internal Debt Management Department, Financial Stability Unit, Financial Markets Regulation Department, Financial Markets Operations Department, Department of Communication and Monetary Policy Department (limited administrative support for this department);
- Work relating to reservation of the VVIP Guest House;
- Administrator to the Reserve Bank of India Employees' Provident Fund.
The Reserve Bank of India’s Vigilance unit is under the overall charge of the Chief Vigilance Officer (CVO). The main function of the Vigilance Unit is to undertake preventive vigilance and anti-corruption measures as also investigate complaints /allegations having vigilance angle (as defined by the Central vigilance Commission) against the employees of the Bank. The Vigilance Unit also implements the various instructions issued by the Central Vigilance Commission. Persons who are victims of corruption or have any information of corruption in the Reserve Bank of India may send their complaints to the CVO of the Reserve Bank by e-mail or by post to:
Chief Vigilance Officer
Reserve Bank of India
Central Office Building, 16th floor
Shahid Bhagat Singh Road
The Reserve Bank of India is observing Vigilance Awareness Week 2016 (the Week) from October 31 to November 5, 2016. The theme of the week this year is “Public Participation in promoting Integrity and eradicating Corruption”.
The Central Vigilance Commission, New Delhi (the Commission) in order to create greater awareness and participation of the public at large has envisaged a concept of “Integrity Pledge” to enlist support and commitment of the citizens and other corporates/entities/firms, etc., especially in the private sector to prevent and combat corruption. The pledges are available on the Commission’s website https://pledge.cvc.nic.in