Tuesday, 14 February 2017

Subsidiaries of RBI for Bank Exams

Subsidiaries of RBI


Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) is one of the wholly owned subsidiaries of the Reserve bank of India (RBI), others being DICGC, NABARD and NHB. It was established on 3rd February 1995 with a view to produce bank notes in India and enable RBI to bridge the gap between the supply and demand for bank notes in the country. The BRBNMPL has been registered as a Private Limited Company under the Companies Act 1956 with its Registered and Corporate Office situated at Bangalore.

The company manages 2 Presses:

  • Mysore in Karnataka
  • Salboni in West Bengal
The present capacity for both the presses is 16 billion note pieces per year on a 2-shift basis. Both the presses have installed the latest “state of the art” Technology in bank note printing. The machinery at Mysore Site has been supplied by Switzerland and that of Salboni by Japan.
Vision of the BRBNMPL is “To emerge as a Global Leader in pursuit of excellence providing the best in Design, printing, services and supply of banknotes and other security documents.”
Mission of BRBNMPL:
To produce bank notes conforming to international standards set by Central Banking and monetary authorities of the world and makes them available in adequate quantities to the Reserve Bank of India at competitive prices.

Establishment of Bharatiya Reserve Bank Note Mudran Private Limited:

The bank note printing in India started in 1928 with the establishment of India Security Press at Nashik by Government of India. The second bank note printing press was established in Dewas (Madhya Pradesh) in 1975 by Government of India.
But with the increase in population of the country and economic activity, demand for bank notes increased. So, the Government of India decided to establish two new bank note printing presses.
The project for setting up new printing presses was started by the Government of India which was then transferred to RBI in December 1989. The BRBNMPL was incorporated as a Private Limited Company on 3rd February 1995.
Considering the magnitude of the project, the Company decided to establish the presses in two phases viz, Phase I for establishing a Mini Press with a single production line at each site. The Phase II involved establishment of the Main Presses with 7 lines of production in Mysore and 8 lines of production in Salboni.

Deposit Insurance and Credit Guarantee Corporation (DICGC)

DICGC is one of the wholly owned subsidiary of the Reserve bank of India (RBI). It was established on 15 July 1978 under Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities to the customers of banks.
This means that the money of customers who deposit money in the banks is insured by DICGC. And the customers who take loans from banks are guaranteed of money by DICGC.
Before DICGC, there were two corporations named Deposit Insurance Corporation (DIC) and Credit Guarantee Corporation of India Ltd. (CGCI) which were merged to form DICGC with a view to integrate the functions of both DIC and CGCI.

Types of banks covered under DICGC:

  • The Deposit Insurance Scheme was initially extended to functioning commercial banks only. This included the State Bank of India and its subsidiaries, other commercial banks and the branches of the foreign banks operating in India.
  • Effective from April 1, 1981, the Corporation extended its guarantee support to credit granted to small scale industries also, after the cancellation of the Government of India’s credit guarantee scheme.
  • With effect from April 1, 1989, guarantee cover was extended to the entire priority sector advances, as per the definition of the Reserve Bank of India.
  • However, effective from April 1, 1995, all housing loans have been excluded from the purview of guarantee cover by the Corporation.

Types of Deposits Covered :

DICGC insures all bank deposits, such as saving, fixed, current, recurring, etc. except the following types of deposits.
  • Deposits of foreign Governments;
  • Deposits of Central/State Governments;
  • Inter-bank deposits;
  • Deposits of the State Land Development Banks with the State co-operative banks;
  • Any amount due on account of and deposit received outside India;
  • Any amount which has been specifically exempted by the corporation with the previous approval of the RBI.

Features of DICGC:

  • A maximum of Rs 1,00,000 is insured for each user for both principal and interest amount.
  • If the customer has accounts in different banks, they all account are insured to a maximum of Rs 1,00,000. However, if there are more accounts in same bank, they all are treated as a single account.
  • The insurance premium is paid by the insured banks itself. This means that the benefit of deposit insurance protection is made available to the depositors or customers of banks free of cost.
  • The Corporation has the power to cancel the registration of an insured bank if it fails to pay the premium for three consecutive half-year periods.
  • The Corporation may restore the registration of the bank, which has been de-registered for non-payment of premium, if the concerned bank makes a request in this behalf and pays all the amounts due by way of premium from the date of default together with interest.

National Bank for Agriculture and Rural Development (NABARD)

National Bank for Agriculture and Rural Development (NABARD) is an apex development bank for rural areas in India which means that it acts as a bank for other banks working for rural upliftment in India. It was established on 12 July 1982 by Act 61, 1981 of parliament. Its headquarters is in Mumbai, Maharashtra.
NABARD was established on the recommendations of the Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) set up by the Reserve Bank of India (RBI) under the chairmanship of Shri B. Sivaraman.
NABARD was set up to focus on rural India, like by increasing the credit flow for agriculture and other rural sectors. So it can be said as country’s specialized bank for Agriculture and Rural Development. Thus it is also a part of developing financial inclusion in the country.

Main Function:

To provide and regulate credit and other facilities for the promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas, and for matters connected therewith or incidental thereto.

Other roles and functions of NABARD:

  • NABARD gives high priority to projects formed under IRDP (Integrated Rural Development Programme);
  • It refinances those institutions which provide credit to the developmental programmes in rural areas;
  • It also refinances to the complete extent for those projects that are taken under the ‘National Watershed Development Programme‘ and the ‘National Mission of Wasteland Development‘;
  • Along with refinancing, NABARD also co-ordinates the rural credit financing activities;
  • It prepares rural credit plans, annually, for all districts in the country;
  • It recommends about licensing for RRBs and Cooperative banks to RBI and acts as their regulator;
  • It also supervises the RRBs and cooperative banks to ensure that the rural financing is done with farmers’ welfare;
  • It also promotes research in rural banking, and the field of agriculture and rural development;
  • It also works for the restructuring of credit institutions, and training and development of staff;
  • It also supports the Self-help Group(SHG) which work for the poor; etc.

 National Housing Bank

National Housing Bank (NHB) was set up on July 9, 1988 under the National Housing Bank Act, 1987.The Head Office of NHB is at New Delhi. NHB is wholly owned by Reserve Bank of India with other subsidiaries of RBI being Bharatiya Reserve Bank Note Mudran Private Ltd.DICGC, and NABARD.

Mission of NHB:
To promote housing finance institutions both at local and regional levels with the focus on low and moderate income housing.
NHB has been established with the following objectives:
  • To act as an apex institution for housing finance companies (apex means the central institution like RBI for all the banks and financial institutions).
  • To promote a network of dedicated housing finance institutions to adequately serve various regions and different income groups.
  • To provide a cost effective housing finance system to all the sections of society.
  • To upgrade housing stock in the country, provide building materials for housing and supply of buildable land.
  • To encourage public companies to provide serviced land for housing.