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Boards of RBI


Central Board :
The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.

  1. Appointed/nominated for a period of four years
  2. Constitution:     
Official Directors

  • Full-time : Governor and not more than four Deputy Governors
Non-Official Directors
  • Nominated by Government: ten Directors from various fields and one government Official
  • Others: four Directors - one each from four local boards
Functions : General superintendence and direction of the Bank's affairs

Local Boards :
  • One each for the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi
  • Membership:

  1. consist of five members each
  2. appointed by the Central Government
  3. for a term of four years

Functions : To advise the Central Board on local matters and to represent territorial and economic interests of local cooperative and indigenous banks; to perform such other functions as delegated by Central Board from time to time. 

Financial Supervision :
The Reserve Bank of India performs this function under the guidance of the Board for Financial Supervision (BFS). The Board was constituted in November 1994 as a committee of the Central Board of Directors of the Reserve Bank of India.

Objective:
Primary objective of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies.

Constitution:
The Board is constituted by co-opting four Directors from the Central Board as members for a term of two years and is chaired by the Governor. The Deputy Governors of the Reserve Bank are ex-officio members. One Deputy Governor, usually, the Deputy Governor in charge of banking regulation and supervision, is nominated as the Vice-Chairman of the Board.

BFS meetings :
The Board is required to meet normally once every month. It considers inspection reports and other supervisory issues placed before it by the supervisory departments.

BFS through the Audit Sub-Committee also aims at upgrading the quality of the statutory audit and internal audit functions in banks and financial institutions.

The audit sub-committee includes Deputy Governor as the chairman and two Directors of the Central Board as members.

The BFS oversees the functioning of Department of Banking Supervision (DBS), Department of Non-Banking Supervision (DNBS) and Financial Institutions Division (FID) and gives directions on the regulatory and supervisory issues.

Functions
 Some of the initiatives taken by BFS include:
  1. restructuring of the system of bank inspections
  2. introduction of off-site surveillance,
  3. strengthening of the role of statutory auditors and
  4. strengthening of the internal defences of supervised institutions.
The Audit Sub-committee of BFS has reviewed the current system of concurrent audit, norms of empanelment and appointment of statutory auditors, the quality and coverage of statutory audit reports, and the important issue of greater transparency and disclosure in the published accounts of supervised institutions.

Current Focus
  1. supervision of financial institutions
  2. consolidated accounting
  3. legal issues in bank frauds
  4. divergence in assessments of non-performing assets and
  5. supervisory rating model for banks. 

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