Study of M&A in Indian and European banking sector

Abstract

The Reserve Bank of India is responsible for implementing the monetary policy of the country. It was established on April 1, 1935 in accordance with the Reserve Bank of India Act, 1934. The RBI is owned by the government of India since 1949. RBI has to balance the acts of getting long term loans at low rates from the markets through the sale of government securities and moderate the interest rate and financial parameters such as the CRR/SLR simultaneously to ensure that inflation is under control and the economic growth is not affected. There have been calls for a separate debt management office by various quarters so that RBI can concentrate on ensuring economic growth through the government’s policy of an independent foreign policy. In spite of all the various activities that the RBI is involved in, it can be said that RBI has done extraordinarily well so far in managing the disparate demands. The Reserve bank’s activities are governed by a board of directors who are appointed by the government of India according to the Reserve bank of India Act. They are in office for a period of four years. There is a governor and a maximum of four deputy governors who acts as the Official directors. There are 15 non-official directors consisting of ten directors from various fiends appointed by the government, one government official and four directors from the four local boards in Mumbai, Kolkata, Chennai and New Delhi. The RBI has 22 regional office and 6 training centers in the country. As of March 2008, RBI had deposits worth Rs. 569594 crores including government deposits and deposits of commercial and co-operative banks.ii It had provided loans and advances to the banking sector to the tune of Rs. 5028 crores.