The Vision of the Human Resource Management Department (HRMD) is essentially to facilitate the Bank to carry out central banking activities, i.e.
(i) To create an enabling environment to enhance the efficiency of the organization
(ii) To draw out from our staff the very best by a system of proper placements, incentives, &
(iii) To create an atmosphere of trust, a certain security of expectations and a feeling that the organization cares about the well being and personal aspirations of the staff. This would help align personal aspirations with professional goals and help enhance efficiency
The Mission of HRMD is to create a facilitating environment to enhance the efficiency of the Bank; to empower the staff so as to draw out the latent potential; and to catalyze conditions for a more wholesome quality of life on the work as well as personal front.
Functions of HRMD
a) To evolve HR policies on
- Performance and Potential Appraisal
- Promotion and Career Progression
- Out of Turn Promotion/ Increment to Sports Person
- Industrial Relations
- Deputation / Secondment
- Compensation Policy
- Retirement and Voluntary Vacation
- Training Establishments
- Mobility (Transfer/Rotation)
- Remuneration and Reward Mechanism
- Staff Welfare
- Organisational Development
- Training and Skills Upgradation (Policy and Implementation, both)
b) Other than policy aspects
- Interface with other institutions, government, central banks, etc. on HRD issues
- To maintain up to date database on human resources in the Bank and undertake analytical studies and ongoing research on different manpower related issues
- To make ongoing review of the appraisal system in order to make it an effective tool for HRD policy management
- To install and implement an effective counseling system
- To design career and succession plans
- To review and revitalize the training functions
- Summer Placement
- Formulate and administer the Staff Suggestion Scheme
- Publication of House Journal, Without Reserve
The Financial Markets Department was constituted on July 6, 2005 with a view to providing an integrated market interface for the Bank and to bringing about integration in the Bank’s conduct of monetary operations. The mandated functions of the Department are as under:
- monetary operations such as open market operations(OMO), liquidity adjustment facility (LAF), and market stabilisation scheme(MSS);
- exchange rate management;
- regulation and development of money market instruments such as call/term/notice money, market repo, collateralised borrowing and lending obligation, commercial paper(CP) and certificate of deposits (CD); and
- monitoring of money, government securities and forex markets.
Functionally, the Department is organised into three groups viz. Market Analysis and Operations Group (MAOG), Market Surveillance and Research Group (MSRG) and Information Support and Services Group (ISSG). The responsibility of MAOG is primarily to conduct operations in the money, government securities and forex markets. As a part of this responsibility, the Group undertakes analysis of various market segments and provides inputs to the Top Management for informed decision making. The MSRG conducts research as well as monitoring of the various market segments towards the objectives of orderly functioning and development of the financial markets. Whilst monitoring enables the Department to perform its role of regulator, research is helpful in further reforms and development of the markets. The ISSG attends to the administrative functions, acts as the back-office for the market operations and deals with the IT related services.
The Financial Stability Unit was set up on July 17, 2009. The main functions of the Unit include:
- Conduct of macro-prudential surveillance of the financial system on an ongoing basis;
- Preparation of financial stability reports;
- Development of a data base of key variables which could impact financial stability in co-ordination with the supervisory wing of the 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 in due course.
Following India's inclusion in the Financial Stability Board (FSB), the Financial Stability Unit provides the Secretariat to the Bank's representative in the FSB.
The Inspection Department would act as the eyes and ears of the Top Management
and discharge its duties with utmost professionalism as the principal provider
of independent and objective feedback on the working of the Bank to the Top Management
to enable it to ensure that the Organization functions efficiently and effectively.
its knowledge, skills and professional competence, the Inspection Department will
carry out inspections to examine, evaluate and report on the adequacy and reliability
of existing systems and follow-up to ensure that:
Laws, Regulations, Internal Policies and Procedures are meticulously followed
- Assets are properly maintained/utilized/safeguarded
Financial crisis is avoided; operational and Reputational Risks are averted
Adequate safeguards are taken for Bank's physical/operational/IT security >
- Quality Customer Service is promptly extended
Inspection Department was set up
along with the formation of Reserve Bank of India in 1935. The objectives of the
Department are as under:
- To assess in clear terms the
achieved and achievable performance of the Offices/branches and Central Office
Departments with the available resources.
- To suggest appropriate
improvements so that performance level could be enhanced further.
oversee the overall Audit function and its various mechanisms put in place.
give feedback to the Top Management on the performance of Offices and Central
OF THE DEPARTMENT
The Inspection Department
of the Bank functions under the direct supervision of the Chief General Manager,
who reports to an Executive Director (ED). To carry out the Departmental functions,
the Department has the following sections.
- Follow-up Section
- Audit Monitoring
- IS Audit Section
and Audit Sub-Committee (IASC) Section
- Administration Section
The Planning Section is responsible for
drawing up and implementing the annual inspection plan. As per the current practice,
inspections of Regional Offices are to be taken up once in 15-18 months and that
of Central Office Departments once in 24-30 months. Presently, around 24 inspections
are conducted every year. Generally, three teams, each headed by a General Manager,
are formed. The activities of the Section include:
1. Preparation of Annual
Calendar of Inspection Programmes & execution thereof
(i) Monitoring submission
of Executive Summary to EDs and Management Audit Report (MAR) to ED/DG
Follow-up action, if required, on the comments made by ED/DG on MAR.
Review of Inspection Programmes
3. Bi-monthly BLMC meetings
Quarterly Activity Report of the Department
5. Follow-up Action on Special/Secret
Notes submitted by Inspection Teams.
6. Updating Inspection Guidelines
7. Supply of Material/Information for Bank's Annual Report.
and updation of Deployment Register
9. Liaison with CODs and Inspection teams
10. Any other activity, not specifically pertaining to other sections.
Follow-up Section is responsible for
monitoring the position of compliance to various inspection reports. As per the
current procedures, the auditee departments and offices are required to send their
first compliance within 45 days from the date of completion of the inspection.
Subsequent compliances should be sent to the Inspection Department every month.
Full & final compliance is required to be achieved in not more than three
months. As per the extant procedure, para-wise compliance is required to be submitted
in respect of paragraphs marked major. In respect of other action paragraphs,
the compliance is to be submitted to the HoD/RD concerned and the overall status
of compliance is to be reported to Inspection Department. In other words, compliance
of these paragraphs will be monitored and judged by the Head of the audittee office/department.
Once compliance is received, the section evaluates and puts up the same to CGM
for final approval. After scrutiny of the compliance, the status of the compliance
could be either COMPLIED, MNP (may not be pursued) or OUTSTANDING. Paragraphs
treated as MNP, along with the status of compliance as submitted by the auditee,
usually will be looked into during the subsequent inspection. Paragraphs, where
the action warranted cannot be completed within a short span of time will go under
this category. For compliance scrutiny purpose, the manager directly reports to
the GM concerned. Other activities of the section include:
timely receipt and scrutiny of compliance to the Management Audit & Systems
- Monitoring paragraphs identified as
critical areas by EDs' Committee and furnishing compliance thereof for placing
before the IASC.
- Conducting Quarterly review of compliance
- Maintenance of guard files of all circulars
of suggestions register for incorporating the suggestions made in the Inspection
Audit Monitoring Cell
accordance with the decision of the Top Management, an Audit Monitoring Cell (AMC)
has been set up in Inspection Department. In principle approval has been given
for setting-up of 4 Snap Audit-cum-Monitoring Teams (SNAM).
Under the above
set-up, Inspection Department, Central Office, oversees the functioning of the
Internal Audit Systems with a view to consolidating and co-ordinating all the
activities relating to Concurrent Audit (CA) and Control Self Assessment Audit
(CSAA) undertaken at all the Offices of the Bank and ensure its smooth functioning.
To achieve the objectives, the Department shall keep the focus on off-site monitoring
as well as on-site scrutiny, wherever necessary.
Off-site monitoring is undertaken
by obtaining periodical returns from Offices, scrutinizing the same and initiating
follow-up as deemed appropriate.
By way of on-site scrutiny for overseeing
the arrangement of Concurrent Audit and CSAA System in the Bank, the SNAM will
be visiting Offices periodically as and when considered necessary.
The main activities of the section
relate to planning and performing of Information Systems Audit of important information
processing facilities in the Bank. Apart from onsite inspection programs, this
section needs to perform various developmental activities such as preparation
of guidelines, audit tools and techniques, etc.
The Section is responsible for co-ordinating
and arranging periodical meetings of IASC and EDs' Committee. Presently, the meetings
of IASC and EDs' Committee are conducted once in two months (approx.). All Secretarial
work for convening EDs' Committee and IASC meetings are performed by this Section.
Various activities include preparation of agenda items for the above meetings,
recording of minutes of these meetings, monitoring actions taken to the points
made in the minutes, etc.
All administrative matters like attendance,
leave, service records, posting, transfer, training, discipline, dispatch, maintenance
of books of accounts, CSAA, local conveyance, LFC claims, newspaper, book grant,
telephone, etc., are attended to by this Section. Implementation of Official Language
Policy in the Department is looked after by Rajbhasha Cell.
The inspections are carried out by
three Inspection Teams, each headed by a General Manager. Depending upon the auditee
entity, the team composition is finalized. Each team has, generally 2 Assistant
General Managers and 3 to 5 Managers. Team members are shuffled across teams depending
upon their availability, core competencies, etc.
& AUDIT SUB-COMMITTEE (IASC)
of the Central Board, in its meeting held on 24th June 1992, recommended that
an Inspection & Audit Sub-Committee of the Board may be set-up to review the
Inspection and Audit Reports and their compliance at periodic intervals, and also
with a view to giving a sharper focus to the internal audit and inspection exercises
towards maximizing productivity and efficiency of operations.
The IASC comprises
of four Directors of Central Board, as nominated by the Governor, DG and ED in-charge
of Inspection and ED in-charge of Administration as its members. CGM, Inspection
Department acts as the Member-Secretary to the Committee. The other DGs/EDs are
invited to attend the meetings of IASC. The Sub-Committee meets about 5 to 6 times
in a year.
The outstanding paragraphs of all Inspection Reports, together
with critical areas, as identified by the EDs' Committee are submitted to the
IASC for discussion and direction. Further, IASC also deliberates over the Statutory
Auditors' Report on Bank's Annual Accounts together with comments furnished by
the Controlling Central Office Department i.e. DGBA (Department of Government
and Bank Accounts). The External Auditor's Report on the Dealing Room operations
of Department of External Investments & Operations (DEIO) is also deliberated
upon by the IASC. The Sub-Committee reviews all aspects of Inspection & Audit
and gives necessary directions for bringing about improvement in the system.
All Inspection Reports
are first reviewed by the EDs' Committee. The compliance position of all Inspection
Reports, before being put up to the IASC for deliberations are reviewed/discussed
in the EDs' Committee meeting in the presence of the concerned Regional Director/Head
of the Department. Thereafter, serious irregularities which may or has led to
potential loss to the Bank, frauds, etc., deviations from laid down policies,
non-implementation of decided policies and other critical areas are identified
by the EDs' Committee for submission to the IASC.
OF INSPECTION IN THE BANK
In order to enhance
the effectiveness of the internal inspection process, various types of inspections
are instituted with specific objectives. Presently, the following types of inspections
are carried out/co-ordinated by the Inspection Department.
Audit & System Inspection
- Information System Audit
- Control Self Assessment Audit
Audit & Systems Inspection (MA & SI)
the MA & SI, the Inspection Teams examine, evaluate and report on the adequacy
and reliability of existing systems and follow-up to ensure that Laws, Regulations,
Internal Policies and Procedures are meticulously followed and the work is carried
out as per defined procedures and Central Office Instructions. Apart from conducting
systems Inspection, the Team also conducts the Management Audit under which the
effectiveness of Organizational Goals, Delegation of Power, Customer Service in
the Department/Office, Management Efficacy etc., are judged.
The objectives of IS Audit are
to verify -
- Whether the valuable IT resources are properly
safeguarded from all threats and exposures.
- Whether the
mechanisation/computerisation processes ensure the Confidentiality, Integrity
and Availability of the data it processes.
- Whether the IT
resources are utilized effectively and efficiently.
the personnel are adhering to established policies and procedures.
existing security controls, backup, and other procedures are sufficient to prevent
catastrophic data loss or incorrect modification of data.
scope of IS Audit include -
- IS Audit shall review all
aspects of information processing in the computerized environment of the Central
Office Departments and the Regional Offices of the Bank.
It shall include evaluation of the compliance of the user Departments/Regional
Offices with general policies and guidelines circulated by the DIT, CO. It shall
also include reviewing the propriety of the process of acquiring the resources
(including Hardware and Software/Services) from vendors.
shall assess the vendor reliability in providing and servicing the IT Systems
which principally determines both the robustness as well as the reliability of
the systems in day-to-day working.
- It shall assess the adequacy
of the overall preparedness for crisis management during events of catastrophic
- It shall assess the adequacy of competencies
of staff operating and managing the IT Systems.
- It shall
verify adherence by auditee units with the Systems and Procedure Manuals of the
applications used by them.
- It shall also include performing
a cost-benefit analysis of the IT Resources procured by the Bank.
scope of IS Audit shall also include collection and evaluation of evidence to
determine whether the Information Systems in use safeguard assets, maintain Data
Integrity, Confidentiality and Availability, achieve Organizational Goals effectively
and utilize resources efficiently.
- The IS Audit Activity
shall also include identification of various security controls existing in IS
environments and assessment of their adequacies to provide recommendations wherever
The Committee on Job Realignment/Job
Consolidation-Implementation recommended, interalia, that Regional/Central Audit
Cells (RACs/CACs) be wound up and their functions be taken over by Inspection/CSAA/Concurrent
Audit. Accordingly, the RACs/CACs were wound up with effect from 1-7-2004 and
their work was trifurcated amongst the concurrent Audit System, CSAA and Management
Audit and Systems Inspections.
Self Assessment Audit (CSAA)
As a sequel to
the recommendation of "Sharma Working Group", CSAA was introduced in
the Bank in July 1999. The aim is to enable the various Departments to carry out
regular health check-ups and assess weaknesses, so that timely reviews are made
and corrective action taken/initiated. Initially, the objective was to facilitate
review of internal controls at frequent intervals and reinforce the efforts of
regular inspection and audit machinery in this regard. With the winding up of
the Regional/Central Audit Cells/(RACs/CACs) with effect from July 1, 2004, the
scope and responsibilities of CSAA have been widened/amplified.
9001-2000 AND BS-7799 CERTIFICATION
has decided to obtain ISO 9001-2000 Certification for select work areas/Departments
of the Bank viz. Currency Management, Public Debt Office, Public Accounts Department,
Deposit Accounts Department and DAPM/HRDD. Inspection Department has been entrusted
with the job of coordinating the ISO Project. A core group has been constituted
for co-ordinating work in this regard. Subsequently, it was decided by the Bank
that Certification under BS-7799 (relating to Information Security) may also be
obtained. Accordingly, necessary action regarding certification under that Standard
has also been initiated. As decided, the ISO:9001-2000 Certification for Issue
& Banking Departments at Kolkata and Hyderabad ROs alongwith the CODs concerned,
viz., DCM & DGBA and BS 7799 for DEIO & IDMD, will be obtained, to begin
Bank of India has been entrusted with the responsibility of supervising the Indian
banking system under various provisions of the Banking Regulation Act, 1949 and
RBI Act, 1934. As regards commercial banks and FIs, this responsibility is discharged
through the Department of Banking Supervision (DBS), which supervises 92 commercial
banks and 9 select financial institutions (FIs), through its 16 Regional Offices.
The Department of Banking Supervision
at present exercises the supervisory role relating to commercial banks and select
FIs in the following forms :
scheduled and special on-site inspections of banks, their off-site surveillance
as also post inspection follow-up of compliance.
Serving as the secretariat for the Board for Financial Supervision (BFS).
Determining the criteria for the appointment of statutory auditors and special
auditors and assessing audit performance and disclosure standards.
Dealing with financial sector frauds and attending to the complaints received
against the banks and FIs from public, banks, Government, etc.
Exercising supervisory intervention in the implementation of regulations which
includes - recommendation for removal of managerial and other persons, suspension
of business, amalgamation, merger/winding up, issuance of directives and imposition
In 2004, the work relating
to inspection of Authorised Dealers has also been transferred from the Foreign
Exchange Department to this Department.
A high powered Board for Financial
Supervision (BFS), comprising the Governor of RBI as Chairman, one Deputy Governor
as Vice Chairman, other Deputy Governors and four Directors of the Central Board
of RBI as Members was constituted in November 1994 with the mandate to exercise
the powers of supervision and inspection in relation to the banking companies,
financial institutions and non-banking financial companies. Presently, BFS exercises
supervision not only over banks but also over select Developmental Finance Institutions
(DFIs), Non-banking Financial Companies (NBFCs), Primary Dealers (PDs) and Urban
Cooperative Banks (UCBs).
The Department of Banking Supervision
has formulated and put in place a supervisory strategy which, besides retaining
the importance of on-site inspections which has been the main plank of banking
supervision, also focuses on three other areas:
monitoring through introduction of a set of Returns;
of the internal control systems in banks and
use of external auditors in banking supervision.
1. An On-site Annual Financial Inspection
system which focuses on statutorily mandated areas of solvency, liquidity and
operational health of the banks. It is based on internationally adopted CAMEL
model (Capital Adequacy, Asset Quality, Management, Earnings, Liquidity), modified
as CAMELS (S for Systems & Control) to suit the needs of Indian banking system.
2. A supervisory rating model based on CAMELS
concept (CALCS for foreign banks), combining both qualitative and quantitative
elements to summarize the performance of individual banks and also to assess the
aggregate strength and soundness of the banking system.
An Off-site Monitoring and Surveillance (OSMOS) system, has been set up in 1995
with the primary objective of analyzing the financial position of the banks in
between on-site inspections. The returns received from the banks cover a wide
rage of data pertaining to assets, liabilities and off-balance sheet exposures,
exposure to sensitive sectors, exposure of banks to interest rate and liquidity
risks (both in domestic and foreign currencies), operations of subsidiaries etc
. This helps the policy makers to refine their regulatory as well as monetary
policy stance so as to achieve a fine balance between growth and financial stability.
Macro-prudential indicators (MPIs) are being compiled since March 2000, as a part
of the Reserve Bank of India's initiatives in adopting best international practices
for monitoring the stability of the financial system in India. The MPIs comprise
both aggregated micro-prudential indicators (AMPIs) of the health of individual
financial institutions and macro-economic indicators (MEIs) associated with financial
5. A Risk Based Supervision
(RBS) approach to inspection, envisages the monitoring of banks by allocating
supervisory resources and focusing supervisory attention according to the risk
profile of each institution. The process also involves the continuous monitoring
and evaluation of the appropriateness of the risk management systems and control
environment of the supervised institution in relation to its business strategy
and exposures, with a view to assessing its riskiness.
A system of Prompt Corrective Action (PCA), based on a pre-determined rule-based
structured early intervention is in place to enhance the existing supervisory
framework. Under the PCA, certain structured actions will be initiated by the
RBI in respect of banks which hit certain defined trigger points in terms of three
parameters i.e. Capital funds to Risk Weighted Assets Ratio (CRAR), Net Non Performing
Assets (NPAs) and Return on Assets (RoA).
Banks are being advised from time to time about the major fraud prone areas and
the safeguards necessary for prevention of frauds, in order to prevent frauds
in the banking sector. In June 2004 a Fraud Monitoring Cell was set up in the
department to (i) review systems and controls in financial sector (ii) discern
the emerging trends in frauds and circulate them to banks through electronic media
(iii) examine international best practices so as to synergize them with the local
requirements wherever necessary (iv) act as a nodal agency for interaction with
various external agencies connected with prevention and investigation of frauds
such as CVC, CBI etc (v) act as a central repository of information on frauds
in financial sector and act as a think tank for fraud prevention.
With a view to enable supervisory assessment of risks and adherence to certain
prudential regulations on group basis, guidelines on consolidated accounting and
supervision have been issued to banks for compliance commencing from the year
ended March 31, 2003. Banks were advised to prepare and submit consolidated prudential
reports (CPR) in this regard and these reports are being reviewed by RBI on a
9. A Working Group on
Financial Conglomerates constituted with one member each from the financial regulators
- RBI, SEBI and IRDA had suggested certain criteria for identifying financial
conglomerates, a monitoring system for capturing intra-group transactions and
exposures amongst such conglomerates and a mechanism for inter-regulatory exchange
of information in respect of conglomerates. The data/ information received from
the 22 conglomerates identified by the Group is analysed by the respective regulators.
10. In view of the added emphasis on the
role of market discipline under Basel II and with a view to enhancing transparency,
banks have been advised that all cases of penalty imposed by the Reserve Bank
of India as also strictures/directions on specific matters including those arising
out of inspection would be placed in the public domain.
The supervisory strategy of the Department of Banking Supervision also includes
Strengthening the internal controls
of banks based on the recommendations of the Jilani Committee and the implementation
of Risk based Internal Audit (RBIA)
use of Statutory Auditors for verification and certification of certain aspects
like adherence by banks to statutory liquidity requirements, prudential norms
relating to income recognition, classification of assets and provisioning, authentication
of bank's assessment of capital adequacy ratio and other ratios to be disclosed
in the Notes on Accounts, comments on certain aspects of bank's functioning in
the form of Long Form Audit Reports (LFAR) etc.
system of concurrent audit of business transactions of banks intended to cover
at least 50 percent of the business of the bank, besides 100% audit of risk sensitive
portfolios such as forex, investments etc is in place.
system of quarterly meetings between senior officials of RBI and CEOs/CMDs of
banks revolving around the major concerns as revealed in the latest inspection
findings, the progress made therein etc has been put in place since the year 2000.
Banks' strategic plans on general improvement in their financial strength, steps
taken to implement such plans and results achieved therein are also discussed.
These meetings provide a forum for bankers to raise issues relating to policy
matters that the bankers feel need clarification.
- Developing NBFCs sector as an integrated and healthy part of
the Financial System; and thereby
- Affording indirect
protection to the interests of their depositors
and Supervisory Framework
The RBI Act as
amended in January 1997 provides for, among other things,
norms for Non-Banking Financial Companies (NBFCs) and prohibition of deposit acceptance
by unincorporated bodies with some exceptions
- Powers of
the Bank to issue asset side regulations
- Compulsory registration,
maintenance of liquid assets and reserve fund
on acceptance of deposits and prudential regulation
regulation of deposit taking NBFCs
- Punitive action like
cancellation of Certificate of Registration, prohibition from acceptance of deposits
and alienation of assets, filing criminal complaints and winding up petitions
in extreme cases, appointment of RBI observers in certain cases
this basic legal framework, the RBI has evolved a supervisory framework for NBFCs
comprising (a) on-site inspection (CAMELS pattern) (b) off-site monitoring through
returns (c) market intelligence, (d) auditors' exception reports.
with State Governments for State Legislations to curb unauthorised and fraudulent
activities in this sector
- Publicity for depositors' education
and awareness, workshops / seminars of trade and industry organizations, depositors'
- Informal Advisory Group as an aid to decision
- Promotion of Self-Regulatory Organization (SRO) of
- Training programmes for personnel of NBFCs, State Governments
and Police Officials
- New legislation for NBFCs to make unauthorised
deposit taking activity a cognisable offence
- Further the
cause of public awareness through education campaigns and workshops/seminars for
various types of public, including auditors of NBFCs
in place an asset liability and risk management system for NBFCs
disclosure norms and new formats of financial statements
enabled filing of returns
- created in July 1997 and 16
Regional Offices opened till date
- The Regional Offices
and Central Office integrated with Wide Area Network (WAN) providing for data
exchange and video conferencing
- Regulatory and supervisory
functions integrated for quick synergistic action
Department is entrusted with the responsibility of regulation of commercial banks
under the provisions contained in Banking Regulation Act, 1949 and the Reserve
Bank of India Act, 1934 and other related statutes and development of banking
policies. This includes the monitoring of banks maintaining the prescribed cash
and statutory liquidity reserves, appointment of chief executive officers and
certain other operational matters as provided in the statute.
Department works towards promoting and fostering a sound and competitive banking
system by laying down prudential regulations relating to capital adequacy, income
recognition, asset classification, provisioning for loan and other losses, investment
valuation, accounting and disclosure standards, asset-liability management and
risk management systems.
The other important
activities of the Department include licensing of new banks, expansion of foreign
and domestic banks, approval for setting up of subsidiaries and undertaking new
activities by commercial banks and follow-up for rehabilitation of weak banks.
- Corporate Governance
paper on Exposure Norms
- Asset Reconstruction Company
- Amendment of Banking Regulation Act
- Setting up international accounting standards for banks
- Credit Information Bureau
- New Capital
- Restructuring of weak banks
prudential norms in keeping with international best practices
- Entry of banks into insurance
- Licensing norm for entry of new banks in
- Reduction of government equity in nationalised
- Improvement in bank transparency
Department of Information Technology (DIT) attends to:
in RBI (Regional Offices and Central Office Departments)
and development of projects for use of banks and financial institutions and
progress of technology in banks
(i) Computerisation in RBI
has been concentrating on computerisation of all activities undertaken in the
Banking Department (Deposit Accounts Department, Public Accounts Department, Public
Debt Office, Establishment Section and Central Accounts Section) and the Issue
Department (Currency Chest Management and Accounting) which have impact on the
balance sheet of the Reserve Bank. These departments also extend customer service.
Computerisation of these departments, therefore, aim at ensuring better house
keeping and efficient customer service. The tasks undertaken involve acquisition
of hardware, development of software, its audit and upgradation. This task has
been completed more or less and the process of further upgradation is on hand.
is extended to specialised departments in preparation of systems requirement specifications
(SRS) and request for proposal (RFP) and developing or outsourcing the software
for successful implementation of projects.
Design and Development of Projects for use of Banks and Financial Institutions
projects developed so far and those listed for development are in the process
of development which directly help systemic efficiency are as under :
- MICR cheque processing at four
metros (Mumbai, New Delhi, Calcutta and Chennai) with image technology (July -
- Electronic Clearing Services (debit and credit)
at 15 centres where RBI has its offices and 30 centres managed by SBI.
Funds Transfer at four metros and its extension to Hyderabad, Ahmedabad and Bangalore
Projects in the Process of Development
- Indian Financial Network (INFINET)
Settlement System (SSS) and Negotiated Dealing System (NDS)
Funds Management System (CFMS)
- Structured Financial Messaging
- Real Time Gross Settlement (RTGS)
- Progress in computerisation and networking
to achieve targets set by the Central Vigilance Commission of coverage of 70%
of their business by computerisation.
- Setting up MICR Cheque
Processing centers at non-metros
- Adoption of standardisation
in the area of hardware, operating system and communication platforms
of generic architecture (tree or star topology for domestic and cross border connectivity)
The main function of the department is to tender legal advice on various matters referred by the operational departments/offices/associates of the Reserve Bank. These references mainly involve interpretation of the Constitution of India, provisions of the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, the Foreign Exchange Management Act, 1999, Government Securities Act, 2006 and various other central and state statutes. The department is also required to interpret the rules and regulations governing the Reserve Bank's staff and to deal with legal issues relating to industrial relations.
The department is associated with legislative drafting on matters related to banking and finance including drafting of subordinate legislation such as rules, regulations and statutory notifications.
In litigation by or against the Reserve Bank, the department prepares instructions to the counsel appearing in courts on behalf of the Reserve Bank and draft pleadings and functions as liaison between the Reserve Bank and its counsel/solicitors.
The department attends to the work relating to investigation of title of land through the Bank's solicitors/advocates with regard to acquisition of premises for the Bank and handles documentation relating to construction of buildings, etc.
Mandate and Objectives
- The Reserve Bank of India Act, 1934 sets out broadly the objectives of monetary policy :
"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".
- Although there is no explicit mandate for price stability, the objectives of monetary policy in India have evolved as maintaining price stability and ensuring adequate flow of credit to the productive sectors of the economy to support economic 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 Reserve Bank has multiple instruments at its command for implementation of monetary policy such as repo and reverse repo rates; cash reserve ratio (CRR); open market operations, including LAF and market stabilisation scheme (MSS); special market operations; sector-specific liquidity facilities; and prudential tools.
- Monetary Policy Department is entrusted with the responsibility of designing, formulating and implementing monetary policy of the Reserve Bank. Accordingly, the Department prepares Governor's Statements on Monetary Policy
- The Policy Statements are currently brought out four times in a year. The Annual Policy (April) and its Second Quarter Review (October) consist of two parts: Part A: Monetary Policy and Part B: Developmental and Regulatory Policies. The First Quarter Review (July) and the Third Quarter Review (January) of Monetary Policy comprise only Part A. .
- 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.
- 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, which meets ahead of the Annual Policy and the quarterly reviews, to review macroeconomic and monetary developments and advise the Reserve Bank on the stance of monetary policy.
- Preparation of Reserve Bank's Annual Policy Statement and its Reviews in each quarter.
- Conduct of Technical Advisory Committee meetings on Monetary Policy in each quarter before the announcement of Policy Statement/Reviews or at any other time as and when needed.
- Conduct of pre-policy consultation meetings with the bankers, market participants, trade bodies, self-regulatory organisations and economists and journalists to facilitate the policy formulation process.
- Periodical meetings with banks on resource management.
- Conduct of Governor’s meetings with banks to announce Policy.
- Policy regarding monetary policy framework and instruments - Design and Operations.
- Monetary projections and preparation of monetary budget.
- Monitoring and review of developments in macroeconomic conditions, prices and inflation, key monetary and banking aggregates, financial markets including interest rates.
- Monitoring and review of maintenance of CRR and SLR by scheduled commercial banks.
- Monitoring of relevant global developments, including monetary policy developments in select major economies.
- Sanctioning and monitoring of refinance limits/utilisation in respect of scheduled commercial banks.
- Issue of Master Circular on Export Credit Refinance Facility every year in July.
- Preparation of 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 main activity of the Internal Debt Management Department is to manage the public debt of Government of India/ State Governments. The Department also regulates and supervises the Primary Dealers System and has the responsibility for development of Government Securities Market. These activities involve:
(i) Floatation of Central/State Government Loans - preparation of calendar for issuances of Government of India dated securities and Treasury Bills, introduction of new instruments for Government?s market borrowings;
(ii) Fixing of limits on Ways and Means advances (WMA) for both Central and State Governments and monitoring the use of these limits on a daily basis;
(iii) Authorisation, regulation and supervision of the Primary Dealer system;
(iv) Market development activities like the introduction of new instruments, development of trading platform, clearing and settlement systems and widening of investor base;
(v) Facilitating State Governments' investment of their surplus cash balances in Treasury Bills and dated securities under various funds.
The main function of this department is management and investment of foreign exchange reserves of the Reserve Bank of India:
- Management and investment 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 IMF.
- All matters incidental to India's membership of the Asian Clearing Union.
- Other matters relating to gold policy, membership of the Bank for International Settlements (BIS) and matters incidental to international cooperation/arrangements
The principal objectives behind the Reserve Bank's approach to reserves management continue to be safety and liquidity. Within these parameters, return optimisation dictates operational strategies. The legal framework for reserves management is provided in the Reserve Bank of India Act 1934. Specifically, Sections 17 (12), 17(12A), 17(13) and 33(1) of the RBI Act 1934 lay down the scope of investment of foreign exchange reserves by RBI. Broadly, the following investment categories are permitted under the RBI Act:
Further, in order to ensure safety and liquidity of our reserves, RBI has also framed internal guidelines/procedures to manage the various risks like credit risk, liquidity risk, operational risks and market risk incidental to the reserves management.
- Deposits with other central banks and Bank for International Settlements
- Deposits with foreign commercial banks
- Investments in securities issued by the Government of any other country or by any institution incorporated outside India provided such securities are guaranteed by the Government of the country concerned. The maturity period of such investments should not exceed more than ten years from the date of such investment.
- Other instruments/institutions as approved by Central Board of RBI.
Department of Government and Bank Accounts(DGBA) is responsible for discharging
certain core traditional central banking functions, viz., acting as bankers to
the banks and governments and administering public debt of both, central and state
governments. It is also responsible for maintenance of the Reserve Bank's internal
accounts and compilation of its weekly statement of affairs and annual balance
The general banking business including
management of public debt of the central and state governments has devolved on
the Reserve Bank by virtue of the provisions of Reserve Bank of India Act, 1934
and agreements with the respective governments. These functions are carried out
on a day-to-day basis through the Reserve Bank's Public Accounts Departments,
Deposit Accounts Department and Public Debt Offices as also through the agency
bank branches. The principal deposit accounts of central and state governments
are maintained at central accounts section of the Reserve Bank at Nagpur which
also attends to granting of ways and means advances to central and state governments.
The Department also monitors disposal of
the complaints received from the members of public regarding unsatisfactory services
rendered by various departments of the Reserve Bank.
Reserve Bank of India has a rich tradition of economic research. Its Department
of Economic & Policy Research (DEPR) :
- Studies and
analyses the basic issues and problems (both domestic and international) affecting
the Indian economy;
- Serves as a primary source of data
and information relating to aspects of the Indian economy, such as,
monetary and credit aggregates, balance of payments and external debt statistics,
internal debt and government finance statistics, and flow-of-funds and financial
- Renders advice/assistance and offer its views in
the realm of economic policy formulation and in shaping monetary, banking and
financial policies; and
- Prepares the Bank's economic publications.
In terms of quality and timeliness
of data dissemination, the Bank conforms to the international standards. These
data are disseminated regularly through various publications and the Bank's website.
The Department brings out six major publications
- annual (the Annual Report, the Report on Currency and Finance, the Report on
Trend and Progress in Banking and Finances of State Governments), monthly (RBI
Bulletin), Weekly (Statistical Supplement) and a tri-annual research journal (RBI
Occasional Papers). In addition, research studies are published in a series of
Staff Studies. The analytical rigour and coverage of these publications have established
them as the reference documents among the market participants, analysts, academics
and international community.
Apart from extend
its research and analytical support to the Bank's policy formulations the Department
coordinates the IMF country consultations and the discussions with the rating
agencies, provides policy support to the Government as well as background material
for the Economic Survey, Finance Minister's Budget Speech and Parliament Questions.
Besides its own internal research, the Department promotes research and obtains
the views of outside experts on issues of importance to the economy through seminars,
collaborative studies and endowment schemes.
Department administers Research Chairs and Fellowships set up by the Reserve Bank
in 17 universities and research institutions, special financial grants for supporting
specific research projects and publications. The Department organises two annual
lectures C.D. Deshmukh and L.K. Jha Memorial Lectures which are delivered by distinguished
personalities in the areas of macroeconomics, banking and finance.
Department also co-ordinates the work relating to SAARC FINANCE, a network of
SAARC central bank Governors and Finance Secretaries. The Department maintains
a well-endowed library at the central office.
Department of Statistics was created in 1959, out of the erstwhile Department
of Research and Statistics. The Department was restructured in December 1981.
It was designated as the Department of Statistics and Information Management.
The Department is headed by a Principal Adviser. The Department has its central
office at Mumbai and regional offices at New Delhi, Chennai and Calcutta.
following are the core functions of the Department:
processing and dissemination of data on banking, corporate and external sectors.
- Planning, designing and organising sample surveys of interest
to the Reserve Bank.
- Undertaking studies in the areas of
interest and relevance to the Reserve Bank.
of forecasts of important macro-economic indicators. o Providing technical support
to other departments of the Reserve Bank in statistical analysis in specific areas.
- 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.
- Coordinating the work relating
to and building a Central Data Base Management System (CDBMS) for the Reserve
Bank, based on data warehousing approach. The system would bring about a radical
change in the information management and delivery system by providing the decision-makers,
analysts and researchers, online and real-time access to a central repository
of clean and consistent historical and current data. The system would provide
extensive data exploitation capabilities to the end-users and will become an integral
part of the decision support infrastructure of the Reserve Bank.
a large database relating to the banking sector.
out two annual publications namely, (i) Basic Statistical Returns (BSR) and (ii)
Statistical Tables Relating to Banks in India, which are based on branch level
detailed data on credit and deposits and annual accounts of banks, respectively.
- Maintaining a comprehensive profile of all the bank offices
in India, which includes the break-up of employees by different categories in
- Maintaining the primary database of all external
sector transactions mediated through the banking sector and tabulations generated
from this database form inputs for compilation of balance of payments (BoP) statistics
by the Department of Economic Analysis and Policy.
periodic surveys to fill data gaps on external sector, such as, foreign investment
survey and survey of unclassified receipts.
- Preparing validated
data on private corporate sector of the economy, which are widely used for policy
and research purposes. The Department publishes, these regularly in the Reserve
Bank of India Bulletin.
- Conducting the 'Industrial Outlook
Survey' at quarterly intervals, since January 1998, with a view to collecting
information on the performance of the private corporate sector engaged in manufacturing
activity, and its prospects in the subsequent quarter for internal purposes of
validating information gathered from outside sources.
analytical studies making use of various statistical, econometric and operational
research techniques. Among the important ones, the Department has been preparing
quarterly reviews on inflation, forecasts on major variables such as national
income, agricultural and industrial production, monetary and banking aggregates.
The Department of Payment and Settlement Systems (DPSS) started operating as a separate department from March 2005.
The payment and settlement systems in India are regulated by the Payment and Settlement Systems Act, 2007 (PSS Act) which was legislated in December 2007. The PSS Act as well as the Payment and Settlement System Regulations, 2008 framed thereunder 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 RBI. Driving its powers under the PSS Act, the Department is responsible for authorization of various payment system operators along with regulation and oversight on the Payment and Settlement Systems which encompass the cheque based clearing systems, Electronic Clearing Service (ECS) suite, National Electronic Funds Transfer (NEFT) System, Real Time Gross Settlement Systems (RTGS), other electronic products like Cards (Debit/Credit/Prepaid), Mobile banking, Internet Banking etc, the inter-institutional Government Securities clearing and the inter-bank foreign exchange clearing.
The Department also provides secretarial support to the Board for regulation and supervision of Payment and Settlement Systems (BPSS), which happens to be a Committee of the Central Board.
The department has four Regional Offices at the four Metros.
The BPSS meets once in a quarter and prescribes policies relating to the regulation and supervision of all types of payment and settlement systems. The BPSS is also expected to set standards for existing and future systems, authorise the payment and settlement systems, determine criteria for membership to these systems, including continuation, termination and rejection of membership.