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RBI stands for the Reserve Bank of India. It was founded on 1st April 1935. It currently has its headquarters in Mumbai. It comes under the Ministry of Finance, Government of India. The current governor or the head of RBI is Mr Shaktikanta Das.
The Reserve Bank of India is responsible for the issue, supply, and current value of the rupee in the national and international economy, making it a vital institution working for the progress of the country.
Objectives of RBI
The following points state the various objectives of RBI
Monetary Policy
- Through this, the reserve bank monitors and controls the currency flow in the market.
- The bank handles currency issues such as black money laundering and offers direction in economic decisions like demonetisation.
- RBI also sets parameters on interest rates that banks can offer.
Payment(UPI)
- Under Unified Payment Interface (UPI), RBI is responsible for giving licences to online digital payments such as PhonePe, Paytm, etc.
- It is also responsible for addressing public grievances. For instance, if a transaction has failed but the amount has been deducted from your account, you can turn to the RBI for help. Matters like these can be sent to RBI if you think the state bank is not operative.
- Under the Payment and Settlement Act, the reserve bank monitors the transaction of payments made online.
Role with State Governments
- It acts as an intermediate between the state and central governments.
- It acts as a debt manager regarding loans taken by the state government.
- It is responsible for debt collection from the state and giving it to the central government with a certain profit percentage.
Foreign Exchange
- RBI executes foreign transactions concerning international trade happening between the countries in dollars.
- The transactions are done through FOREX reserves under RBI.
- RBI can also do transactions in the form of gold bonds or reserves as substitutes for dollars.
Financial Control
- RBI can change the rate of interest overnight to maintain liquidity among banks.
- Under the influence of monetary policy, this fiscal control can decide the repo rate, which is primarily used for the control of inflation.
- Under Cash Reserve Ration (CRR), 4% of the received deposit is kept as a reserve in RBI when a bank gets a deposit. It cannot be given as a loan.
- In CRR, 4% of the deposit is kept apart from the banking transaction for an emergency case, such as a bank going defunct, then this given amount of money is given to the depositor. It will be discussed more in the next point.
- Similarly, under Statutory Liquid Ratio (SLR), RBI maintains liquid assets in the form of gold reserves and approves securities. The current SLR is 18%.
Bankers of Last Resort
- Being the central bank of the Indian economy, RBI comes to aid banks which are going defunct.
- With the given 4% of its CRR, it provides liquidity to the bank when no one else is willing to fund it.
RBI Balance Sheet
- RBI balance sheets can also be termed as the annual report, which consists of the assets and liabilities of RBI.
- From this, the profit percentage is known with which the government makes the development policies.
- It is vital for the functioning of a country’s economy widely regarding the currency value functioning, monetary policies, and reserve management objectives.
- It also helps in the re-evaluation of the balance in accounts that are related to liabilities and provisions.
Conclusion
The Reserve Bank of India (RBI) is the central bank of India’s economy and is responsible for the value of the Indian currency in the international market. Through its monetary policy and financial control, RBI supervises the repo rate as well as the money supply. It is responsible for monitoring transactions and licences of UPI modes of payment like PhonePe, Paytm, etc. It acts as an intermediate banker between state governments and the Government of India.
RBI also addresses public grievances. With SLR under financial control, it maintains assets in the form of gold. Whereas with CRR, it maintains a percentage of deposits for emergencies, such as a bank that is going defunct. RBI comes in and lends help by giving the money to the depositors from the percentage deposit. This is why RBI is called the ‘Bankers of Last Resort’.
Prime Minister Narendra Modi visited Ireland on September 23, 2015. It was the second time an Indian Prime Minister had visited Ireland. The first being Jawaharlal Nehru’s visit in 1956. Ireland is an island nation located in Northwestern Europe and surrounded by the North Atlantic Ocean.
The Prime Minister of Ireland, Enda Kenny, had hosted PM Modi during his visit. The PM was attended by other dignitaries such as the Minister of Foreign Affairs and Trade, Charles Flanagan, and Ireland’s Ambassador to India, Feilim McLaughlin. The main aim of the visit was to create stronger ties and improve trade and cultural relations. Described below is the impact of the PM’s Ireland visit.
Impact on trade and commerce
India and Ireland have strong bilateral trade and business relations. Before the PM’s visit, trades with Ireland were valued at €650 million in business in 2014. This included exports worth €248m and imports worth €402 million.
The indigenous exports increased from €32 million in 2012 to €55 million in 2014. In 2019, the total bilateral trade was around €1.2 billion. The exports and the imports have also increased to €636 million and €480 million respectively. Currently, the total trade between India and Ireland is valued at €4.2 billion. This resulted from improved bilateral ties between the two nations, owing to Prime Minister Modi’s visit to Ireland.
Indian Companies in Ireland
Many Indian companies carry out trade and commerce in Ireland. They provide services to Irish markets and consumers across various industries. Pharmaceutical giants such as Reliance Genemedix and Amneal Pharmaceuticals operate in Ireland. Major IT companies such as Wipro, Infosys, TCS, and HCL also have a strong presence in the country. The trade relations were bolstered after Indian Prime Minister Narendra Modi visited Ireland.
Other companies like Crompton Greaves, Deepak Fasteners, Jain irrigation systems, and Shapoorji Pallonji provide consumer goods and services. Likewise, many Irish companies conduct their business in the Indian market. These companies include pharmaceutical and nutrition players like ICON and Glanbia, IT firms like Globoforce and other companies like Keventer, CRH Taxback Group, and Connolly Red Mills.
Impact on Education
Ireland has been a coveted destination for higher education for Indian students. Over 5000 Indian students have enrolled for higher studies in various institutions in Ireland. The students are admitted to engineering, technology, medicine and management colleges. More than 30 research agreements have been signed between the two nations that allow institutes in both countries to collaborate.
Many reputed institutes like Trinity College, Dublin, and Thapar University, Patiala, have signed MOUs for engineering and science disciplines programmes. Thus, Ireland is an essential collaborator in graduate and doctoral research. This collaboration is also considered an impact of the PM’s Ireland visit.
Indian Community in Ireland
Ireland is diplomatically significant for India also due to the large number of Indian citizens residing there. The Indian origin population is approximately 45,000 people, of whom 18,500 are Non-Resident Indians (NRI), and others are Persons of Indian Origin (PIO). The majority of the residents are working professionals employed in engineering, healthcare and management positions.
It has helped in establishing many policies for the Indian origin population. Two such policies in practice are wearing hijab as a part of the police uniform and the non-requirement of obtaining an additional work permit for the spouse or the partner of Critical Skill Employment Permit holders.
Cultural Impact
As a result of a large population of Indian origin citizens in Ireland and the relationship between the two nations, Ireland promotes Indian culture in various forms. One such example is the celebration of Diwali in Ireland since 2008. The event is organised every year in collaboration with Irish and Indian committees.
Further, an annual contemporary film festival is also a part of the celebration of Indian culture. The promotion of such events indicates the importance of cultural exchange between the two nations. The Irish communities also take a keen interest in conventional practices such as cultivating and consuming Indian herbs and spices. This connects the agricultural practices between the two nations. The cultural ties between the countries were strong, and Prime Minister Modi’s visit to Ireland helped strengthen them further.
Another significant practice is the celebration of International Yoga Day in Ireland. The Irish communities have accepted Yoga as a form of a healthy lifestyle. The practice is similar to the Indian tradition.
Tourism
India attracts around 44,000 Irish tourists every year. Indian tourists too visit Ireland in similar numbers. This was facilitated by the introduction of the common British-Irish visa scheme. This scheme allows the tourists to visit the U.K. and Ireland under one visa, rather than applying for two separate visas. It is valid for short stays. India also extended its Electronic Tourist Visa facility to Ireland to digitally facilitate visa approval and generation. The impact of the PM’s Ireland visit was such that it has also helped establish the tourism sector in both countries.
Conclusion
The diplomatic ties between Ireland and India have been impacted positively after Prime Minister Modi visited Ireland in 2015. It was an essential step toward strengthening the bilateral relationship between these two nations. India and Ireland have been important to each other since the 1900s.
In 2010 and 2017, two honorary consulates were established in Chennai and Kolkata. Later in 2019, a formal and fully functional consulate general in Mumbai. Ireland and India have also shown their allegiance to fighting terrorism after the Pulwama attack. India has also hosted several Irish dignitaries on various occasions. These visits were directed toward engagement in business, education, health and tourism.
Further, many agreements were signed to provide opportunities for employment to people of both countries. Prime Minister Modi’s visit to Ireland helped revive relatively stagnant relations between these two nations. Several cultural and historically similar instances bind these two nations. From Yeats and Tagore to cricket and Diwali, the cultural semblance between these two nations has helped create a strong tie between them.
