rbi act

RBI ACT –1934

As per the RBI Act-1934 RBI was established on 1-4-1935 and nationalized on 1.1.1949.

Central govt. own 100% of the capital of the bank.

The share capital of the bank(paid-up) is Rs. 5.00 crore with the face value of a share is Rs. 100.

RBI ACT –1934SECTIONSIMPORTANT PROVISON OF THE ACT:

SECTION-2(e) Schedule bank means a bank whose name

is included in the 2nd schedule of RBI act 1934 whose paid-up capital and reserve requirement of not less then 5.00 lacs, and satisfaction of RBI that the affairs will not be conducted by the bank in a way to jeopardize the interest of the depositor.

SECTION-17 Define various type of business which RBI

may transact. Which include acceptance of deposit without interest from central/state govt., any other person /institution. purchase /sell foreign exchange, securities, rediscount of the bills/promissory note,grant loan etc.

SECTION-18 RBI provides EMERGENCY loans to

banks on liberal terms.

SECTION-21 RBI has the right to transact Govt.;

business in India i.e. remittances, exchange,keeping deposit free of interest etc.

SECTION-22 Sole right to issue bank notes.

SECTION-23 Bank note shall be issued by the issue

deptt.

SECTION-24 Denominations of notes :-

( 2,5,10,20,50,100,1000,5000,10000)

SECTION-28 RBI can frame the rule of refunding value

of mutilated,soiled or imperfect notes as a matter of grace.

SECTION-31 Nobody other then RBI of central govt. is

authorized to make promissory note payable to bearer on demand.Further it restricts on drawing bearer drafts.

SECTION-42(1) Define Cash Reserve Ratio.As per this section ,

every bank is required to maintain an average daily balance equal to at least fixed percentage of its net demand and term liabilities with RBI.

RBI is empowered to increase CRR. RBI pay interest at the rate of 3.5% over the

statutory reserve prescribe by th RBI. (presently it its 6%

SECTION-45-F Empowered RBI to collect credit

information related to borrowers and suit filed accounts.

SECTION-49 Define Bank Rate, as rate for any loans and

advances against specified securities provided to SCBs by rediscounting of purchase of eligible bills. Presently the bank rate is 6%.

Parveen Kumar Goyal , Mnager ( training)

THANKS

STATE BANK OF BIKANER & JAIPUR

STC ,BIKANER

COMPILED BY:- P.K.GOYAL (MANAGER TRAINING)