The Central bank is the core bank of a country. It performs various functions which are very important for the growth and development of the Nation. Reserve Bank of India popularly called RBI is the Central Bank in India.RBI regulates
the volume of credit and currency in India, pumps in money when the market is dry and pumps out money when there is excess credit.
The main function of a central bank is to act as governor of the machinery of credit in order to secure stability of prices.
It regulates the volume of credit and currency, pumping in more money when market is dry of cash, and pumping out money when there is excess of credit.
In India RBI have two departments, namely. Issue department and Banking department.
Central bank has been given exclusive monopoly of note-issue in the interest of uniformity, better control, elasticity, supervision, and simplicity. It will also avoid the possibility of over-issue by individual banks.
The central banks, thus, regulate the currency of country and the total money-supply in the economy. The central bank has to keep gold, silver or other securities against the notes issued. The system of note-issue differs from country to
country.
The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 june 1806. pursuant to the provisions of the State Bank of India act of 1955, the Reserve Bank of India, which is India's Central Bank, acquired a controlling interest in the imperial bank of india.
in 2008, the Government of India acquired the reserve bank of india's stake in sbi so as to remove any conflict of interest because the rbi is the country's banking regulatory authority.
This made SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and operatonal take-over between September 1959 and October 1960, which made eight state banks associates of SBI.
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Katadata.co.id - Lembaga Penjaminan Simpanan (LPS) noted that there are as many as 100 banks have been closed or liquidated, consisting of one public banks and 99 of the Bank Pekreditan (BPR).
The agency has also poured funds amounting to Rp 1.5 trillion to pay claims customer deposits of such banks.
The secretary of LPS Muhamad Yusron explained, closing the bank carried out since the LPS established in 2005 until the end of September 2019.
The closure of the banks most committed in the territory of west Java which is as much as 34 banks, followed by West Sumatra 16 banks, East Java 8 banks, as well as Central Java and Bali each of the 6 banks.
(Read: the Number of Accounts Increased, the Bank Deposits edged Down in August 2019)
According to him, these banks were closed because of poor performance due to errors in management by the managers.
