Get AHSEC Class 12 Finance Chapter: 1 Organization and Management of RBI Important Questions Answers 2025.
In this Post we have provided HS 2nd Year Finance Chapter: 1 Organization and Management of RBI Important Notes with Marked/highlighted previous year questions asked in AHSEC Examination.
AHSEC Class 12 Finance Notes
Chapter: 1 Organization and Management of RBI
1. Discuss the objectives of the establishments of RBI?
Ans: The Reserve Bank of India was established on 1st April, 1935. The main objectives for establishment of the Reserve Bank of India as the Central Bank of our country were as follows:
i) For the proper arrangement of industrial finance for the industries of our country.
ii)To stabilize the internal value and the external value of the rupee.
ii) For the balanced and systematic development of the banking sector in our country.
iv) To manage the public debts properly.
v) For centralisation of cash reserves of the commercial banks of our country.
vi) For the development of organised money market in our country
vii) For maintaining balance between the demand and the supply of the currency in our country.
viii) To manage the monetary and the credit system of our country.
2. Write in detail about the organisation and management of the Reserve Bank of India. Or Write a note on the ‘Central Board of Directors of the RBI.
Ans: The organisation and management of the Reserve Bank of India (RBI) can be discussed under the following three heads:
1. Central Board: The Central Board of Directors of RBI consists of 20 members. These members are appointed or nominated as follows:
i. One Governor is appointed by the Central Government for a term of 5 years.
ii. Four Deputy Governors are appointed by the Central Government for a term of 5 years.
iii. Four Directors are nominated by the Central Government, with one director coming from each of the four Local Boards.
iv Ten Directors are nominated by the Central Government for a period of 4 years.
v. The Governor of RBI serves as the Chief Executive Officer of the Bank and also acts as the Chairman of the Central Board of Directors. In the absence of the Governor, a Deputy Governor nominated by the Governor acts as the Chairman of the Central Board.
vi) One Government Official, specifically the Finance Secretary of the Government of India, is nominated by the Central Government.
2. Local Boards: Apart from the Central Board, there are four Local Boards with headquarters in Mumbai, Kolkata, Chennai and New Delhi. Each Local Board consists of five members and they are appointed by the Central Government for a term of 4 years.
Offices of RBI:
The Head Office of RBI is located in Mumbai. Additionally, the offices of the Local Boards are situated in Delhi, Kolkata, Mumbai and Chennai. To ensure smooth functioning and coordination in the banking system, RBI has also established local offices or branches in various major cities across the country.
3. Describe about the administrative department of the RBI ?
Ans: For maintaining smooth working /functioning, the Reserve Bank of India has established different administrative departments. These departments are the part of the internal organisation of the Reserve Bank of India.
1. Issue Department
2. Banking Department
3. Department of Currency Management
4. Department of Government and Bank Accounts
5. Department of Expenditure and Budgetary Control
6. Department of Banking Operations and Development
7. Department of Non-Banking Companies
8. Rural Planning and Credit Department
9. Department of Exchange Control
10. Department for Industrial Credit, etc.
Very Short Answer type and Short Answer type Questions
1. When was the Reserve Bank of India constituted?
Ans: 1934.
2. When was the RBI Act passed?
Ans: The Reserve Bank of India Act was passed in 1934 (enacted on March 6, 1934).
3. When did the Reserve Bank of India begin functioning/ established?
Ans: The Reserve Bank of India (RBI) was established on April 1, 1935. (in Kolkata)
4. What was the initial share capital of the Reserve Bank of India?
Ans: Rs. 5 crores.
5. How many fully paid-up shares were there in the Reserve Bank of India initially?
Ans: 5 lakhs.
6. What was the face value of each share in the Reserve Bank of India?
Ans: Rs. 100.
7. When was the Reserve Bank of India nationalised?
Ans: After independence.
8. What was the compensation rate given to private shareholders during nationalization?
Ans: Rs. 118 and 10 annas per share.
9. When did the Reserve Bank of India become a state-owned and state-controlled central bank? or When was the RBI nationalised?
Ans: 1st January 1949.
10. What is the term of office of the Governor of RBI?
Ans: The term of office for the Deputy Governors of the Reserve Bank of India (RBI) is 5 years. (Now it is 3 years, but not in your AHSEC book)
11. How many Local Boards are there in RBI?
Ans: There are four Local Boards of the RBI, each with its headquarters in Mumbai, Kolkata, Chennai and New Delhi.
12. What was the Act that facilitated the transfer of public ownership of the Reserve Bank of India?
Ans: Reserve Bank of India (Transfer of Public Ownership) Act, 1948.
13. Write the names of any two departments of the RBI.
Ans: Issue Department and Banking Department
14. Where is the Head Office of the Reserve Bank of India situated?
Ans: The Head Office of the Reserve Bank of India is located in Mumbai.
15. Where are the offices of the Local Boards of the Reserve Bank of India situated?
Ans: The offices of the Local Boards of the Reserve Bank of India are situated in Delhi, Kolkata, Mumbai and Chennai.
16. What is the purpose of the Issue Department in the Reserve Bank of India?
Ans: To manage and oversee the issuance and supply of currency notes and coins in circulation.
17. Which department is responsible for regulating and supervising banking activities in the Reserve Bank of India?
Ans: Banking Department.
18. What does the Department of Currency Management in RBI handle?
Ans: It deals with the management and logistics related to currency, including its distribution and circulation.
19. Which department is responsible for managing the accounts of the government and banks in the Reserve Bank of India?
Ans: Department of Government and Bank Accounts.
20. What is the role of the Department of Expenditure and Budgetary Control in RBI?
Ans: It oversees and controls the expenditure and budget management of the Reserve Bank of India.
21. Which department focuses on planning and credit facilities for rural development in RBI?
Ans: Rural Planning and Credit Department.
22. What is the main function of the Department of Non-Banking Companies in the Reserve Bank of India?
Ans: To regulate and supervise non-banking financial companies (NBFCs) operating in the country.
23. Which department is responsible for the development and regulation of banking operations in RBI?
Ans: Department of Banking Operations and Development.
Short Answer type Questions:
1. How is the Central Board of Directors of the Reserve Bank of India constituted and what are its key members?
Ans: The Central Board of Directors of the Reserve Bank of India consists of 20 members. The key members include:
- One Governor appointed by the Central Government for a term of 5 years.
- Four Deputy Governors appointed by the Central Government for a term of 5 years
- Four Directors nominated by the Central Government, one each from the four Local Boards.
- Ten Directors nominated by the Central Government for a period of 4 years. One Government Official (Finance Secretary of the Government of India) nominated by the Central Government.
2. What is the role of the Governor in the Reserve Bank of India’s management?
Ans: The Governor serves as the Chief Executive Officer of the Reserve Bank of India and also acts as the Chairman of the Central Board of Directors. In the absence of the Governor, a Deputy Governor nominated by the Governor assumes the role of Chairman of the Central Board.
3. What are the Local Boards and where are they headquartered? or Write a brief note on the Local Boards’ of the RBI.
Ans: Besides the Central Board, there are four Local Boards with their headquarters located in Mumbai, Kolkata, Chennai and New Delhi. Each Local Board consists of five members and they are appointed by the Central Government for a term of 4 years.
4. Why has the Reserve Bank of India established local offices or branches in different big cities of the country?
Ans: The Reserve Bank of India has opened local offices or branches in different major cities of the country to ensure smooth functioning of the banking system. These local offices help the central bank in carrying out its functions effectively and efficiently across the nation.
-0000000-
