Functions

The Department of Information Technology (DIT) attends to:

• Computerisation in RBI (Regional Offices and Central Office Departments)

• Design and development of projects for use of banks and financial institutions and

• Monitoring progress of technology in banks

Current Focus

1. Computerisation in RBI

   DIT 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.

   Support 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.

2. Design and Development of Projects for use of Banks and Financial Institutions

   The projects developed so far and those listed for development are in the process of development which directly help systemic efficiency are as under :

   Projects already developed

   • MICR cheque processing at four metros (Mumbai, New Delhi, Calcutta and Chennai) with image technology (July - October 1999)

   • Electronic Clearing Services (debit and credit) at 15 centres where RBI has its offices and 30 centres managed by SBI.

   • Electronic Funds Transfer at four metros and its extension to Hyderabad, Ahmedabad and Bangalore

   Projects in the Process of Development

   • Indian Financial Network (INFINET)

   • Securities Settlement System (SSS) and Negotiated Dealing System (NDS)

   • Centralised Funds Management System (CFMS)

   • Structured Financial Messaging Solution (SFMS)

   Real Time Gross Settlement (RTGS)

3. Monitoring

   • 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

   • Development of generic architecture (tree or star topology for domestic and cross border connectivity)

Functions

• 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 Constitutions of India/administrative law and provisions of the Reserve Bank of India Act, Banking Regulation Act (both applicable to commercial and cooperative banks), the Foreign Exchange Management Act, Public Debt Act, Industrial Disputes Act 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 without he legal matters relating to industrial relations.

• The department has been entrusted with the functions of drafting legislation or amendments to existing legislation as well as subordinate legislation such as rules, regulations and statutory notifications or orders made under the acts applicable to banking industry.

• In litigation matters 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.

• In regard to acquisition of premises for the Bank, the department attends to the work relating to investigation of title of land through the Bank's solicitors/advocates but handles documentation relating to construction of buildings, etc., departmentally.

• The officers of the department are also appointed as sole arbitrators in respect of disputes between public sector banks, involving amounts not exceeding Rs.50,000.

• The officers of the department are nominated on expert committee/working groups, constituted for matters dealing with in-house Reserve Bank functions as also for other matters such as, electronic funds transfer, factoring, recovery tribunals for banks and financial institutions, regulation of financial companies, etc.

Functions

The main objective of the Monetary Policy Department is formulation, monitoring and implementation of the annual monetary and credit policy. While the policy work in the Department constantly keeps evolving in the context of developments in the economy, with a view to enhancing its functional role with focus on monetary policy and monetary management, the Department currently places greater emphasis upon market intelligence/analysis, policy evaluation and related technical studies.

The Department functions as a multi-disciplinary unit and draws its staff from both, specialised and operational departments. The core activities of the Department include:

• Monetary projections and preparation of monetary budget

• Monitoring of movements in key monetary and banking aggregates including interest rates.

• Periodic review of monetary and credit developments

• Monitoring and review of compliance of scheduled commercial banks with CRR and SLR stipulations.

• Sanctioning and monitoring of refinance limits/utilisation in respect of scheduled commercial banks.

• Collection, compilation and analysis of data on developments in the money market.

• Collection, compilation and analysis of data on mobilisation of resources by select all-India financial institutions.

• Analysis and discussions on resource management plans of banks.

• Continuous monitoring and review of prices and credit floor in respect of sensitive commodities.

Current Focus

The Department is currently developing a robust short-term operational model, which would take into account the behavioral relationships among different segments of the financial sector to understand the transmission mechanism of monetary policy in pursuit of objectives during the transition to greater financial integration. It also provides secretariat to the Standing Committee on International Financial Standards and Codes.

Functions

The Reserve Bank of India manages public debt and issues new loans on behalf of the central and the state governments under the powers derived from the Reserve Bank of India Act. It also undertakes cash and liquidity management for the Government of India and state governments and administers the scheme of ways and means advances.

Internal Debt Management Cell manages internal debt. This involves auctioning the government debt from time to time, introduction of new instruments, smoothening the maturity structure of debt, placing of debt at market related rates and improving depth and liquidity of government securities by developing an active secondary market for them. To administer the monetary policy it also undertakes liquidity operations as and when required through various instruments, such as, open market operations, repos and reverse repos, etc.

Current Focus

• Retailing of government securities including trading of gilts on stock exchange.

• Upgradation of technology for trading and settlement of transactions in government securities including establishment of clearing corporation.

• Introduction of new Government Securities Act to replace the existing Public Debt Act

Functions

The main activities of the Department are management of exchange rate of the Indian rupee and management and investment of foreign exchange reserves of the Reserve Bank of India. This involves:

• Management of the exchange rate of the rupee in accordance with the policy laid down from time to time.

• 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.

• Implementation of exchange guarantee schemes.

• 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 banking arrangements between India and Russia.

The day-to-day movements in exchange rates are market determined. The primary objective of the Reserve Bank in regard to the management of the exchange rate continues to be the maintenance of orderly conditions in the foreign exchange market, meeting temporary supply-demand gaps which may arise due to certainties or other reasons, and curbing destabilising and self-fulfilling speculative activities. To this end, the Reserve Bank closely monitors the developments in the financial markets at home and abroad, and carefully coordinates its market operations with appropriate monetary, administrative and other measures as it considers necessary from time to time.

The essential framework for reserves management in the Reserve Bank as regards currency, market and instruments for investment are provided in the Reserve Bank of India Act 1934. The overall stance of the Reserve Bank of India's reserve management policy continues to be a risk averse one aiming at stable returns. The principal objectives behind the Reserve Bank's approach continue to be safety and liquidity. Within these parameters, return optimisation dictates operational strategies.

Current Focus

• Functioning in a fully automated environment, the Department currently is engaged in upgrading its systems.

• The Department is also increasing its in-house research capabilities in fixed income analysis.

Functions

The 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 sheets.

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.

Functions

The Reserve Bank of India has a rich tradition of economic research. Its Department of Economic Analysis and Policy (DEAP):

• 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,

• Prepares monetary and credit aggregates, balance of payments and external debt statistics, internal debt and government finance statistics, and flow-of-funds and financial saving.

• 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.

The 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.

The 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.

Functions

The 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 Statistical Analysis and Computer Services. 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.

The following are the core functions of the Department:

• Collection, 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.

• Generation 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.

Current Focus

• 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.

• Maintaining a large database relating to the banking sector.

• Bringing 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 such offices.

• 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.

• Conducting 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.

• Undertaking 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.