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1Structure of Indian Financial System:
Central Bank of the Country (RBI in case of India)
Cooperative Societies
Other Institutions
Commercial BanksPublic Sector
Pvt. Sector
State Coop.
Land Dev Banks
Pub SectorGov
Pvt. Sector
SBI & As
NationalisedBanks
RRBs
Foreign BanksNon-Scheduled Banks
NSC, PO, EPF
LIC, GIC, UTI, EXIM Bank, IDBI, IFCI, IRBI, NABARD, SFC, SIDBI, STCI, etc.
Chits, Nidhis, Corporate bodies, Hire PurchCos., Investment Cos, Merchant Banks,
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CENTRAL BANK
•ItistheAPEXmonetaryinstituteinthemoneymarketwhichactsasthemo
netaryauthorityofthecountryandservesastheGovernment?sbankaswellasthebankers?bank.
•Inbrief,wemaysaythatthecentralbankisanorganoftheGovernmentwhich,byreasonofitsoperationsinfluencestheworkingoftheFIsofthecoun
try.
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How does the Central Bank differ from other banks?
?Is a Government Organ
?It does not exist to secure maximum profit
?Have a special controlling relationship with the commercial banks
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General Functions of The Central Bank:
?Issue of Currency Notes:
?Issued on the basis of minimum currency reserve system.
?Acts as Government Banks:
?Collection and disbursements
?Mgt of public debt and issue of new loans and treasury bills
?Temporary advance to Government in anticipation of collection of taxes
?Government?s financial agent
?Advisor to Government regarding Monetary and Fiscal Policies
?Acts as Banker?s Bank
?Holds certain portion of deposits of commercial banks
?Extends financial facilities to CB when there is a crisis
?Acts as a bank for central clearance
?Foreign Exchange
?Monopoly power to control and regu ...