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Reserve Bank of India Act, 1934: This is the primary legislation governing the functions and powers of the Reserve Bank of India (RBI), which is the central bank of India. The act provides for the regulation of banking and credit in India and gives the RBI the authority to issue licenses to banks and regulate their activities.
The preamble of the Reserve Bank of India describes the basic functions of the reserve bank as: [13]...to regulate the issue of Bank notes and 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; to have a modern monetary policy framework to meet the challenge of an increasingly complex ...
In 1965, the Act was amended to include cooperative banks under its purview by adding the Section 56. Cooperative banks, which operate only in one state, are formed and run by the state government. But, RBI controls the licensing and regulates the business operations. [2] The Banking Act was a supplement to the previous acts related to banking.
On 17 July 2014, the RBI released the draft guidelines for payment banks, seeking comments for interested entities and the general public. [7] On 27 November, RBI released the final guidelines for payment banks. [8] In February 2015, RBI released the list of entities which had applied for a payments bank licence. There were 41 applicants. [9]
If any Indian bank fails to maintain the required level of the statutory liquidity ratio, it becomes liable to pay penalty to the Reserve Bank of India. The defaulter bank pays penal interest at the rate of 3% per annum above the bank rate, on the shortfall amount for that particular day. However, according to the Circular released by the ...
In India, Reserve Bank of India has implemented the Basel II standardized norms on 31 March 2009 and is moving to internal ratings in credit and AMA (Advanced Measurement Approach) norms for operational risks in banks. Existing RBI norms for banks in India (as of September 2010): Common equity (incl of buffer): 3.6% (Buffer Basel 2 requirement ...
The acronym 'RTGS' stands for Real-time gross settlement. The Reserve Bank of India (India's Central Bank) maintains this payment network. Real-time gross settlement is a funds transfer mechanism where transfer of money takes place from one bank to another on a 'real time' and on 'gross' basis.
The functions of the subsidiary are governed by the provisions of 'The Deposit Insurance and Credit Guarantee Corporation Act, 1961' (DICGC Act) and 'The Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961' framed by the Reserve Bank of India in exercise of the powers conferred by sub-section (3) of Section 50 of the Act.