...Establishment of the Bank The Central Bank of Kenya was established in 1966 through an Act of Parliament - the Central Bank of Kenya Act of 1966. The establishment of the Bank was a direct result of the desire among the three East African countries to have independent monetary and financial policies. This led to the collapse of the East Africa Currency Board (EACB) in mid 1960s. Structure of the Bank Responsibility for determining the policy of the Central Bank is given by the Central Bank of Kenya Act to the Board of Directors. The Board consists of seven members: - the Governor, who is also its chairman - the Deputy Governor, who is deputy chairman - the Permanent Secretary to the Treasury who is a non-voting member - five other non executive directors All members are appointed by the President to hold office for a term of four years and are eligible for reappointment. In the case of the Governor, appointment is for a maximum of two terms of four years each and can only be terminated by a tribunal appointed by the President to investigate his conduct. The executive management team comprises the Governor, the Deputy Governor and nine heads of department who report to the Governor. The Bank operates from its head office in Nairobi and has branch offices in Mombasa, Kisumu and Eldoret. The Central Bank Act and it's relations with the Government The Central Bank of Kenya Act of 1966 set out objectives and functions and gave the Central Bank limited autonomy...
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...Creating a Central Bank for the Philippines A group of Filipinos had conceptualized a central bank for the Philippines as early as 1933. It came up with the rudiments of a bill for the establishment of a central bank for the country after a careful study of the economic provisions of the Hare-Hawes Cutting bill, the Philippine independence bill approved by the US Congress.During the Commonwealth period (1935-1941), the discussion about a Philippine central bank that would promote price stability and economic growth continued. The country’s monetary system then was administered by the Department of Finance and the National Treasury. The Philippines was on the exchange standard using the US dollar—which was backed by 100 percent gold reserve—as the standard currency.In 1939, as required by the Tydings-McDuffie Act, the Philippine legislature passed a law establishing a central bank. As it was a monetary law, it required the approval of the United States president. However, President Franklin D. Roosevelt disapproved it due to strong opposition from vested interests. A second law was passed in 1944 during the Japanese occupation, but the arrival of the American liberalization forces aborted its implementation.Shortly after President Manuel Roxas assumed office in 1946, he instructed then Finance Secretary Miguel Cuaderno, Sr. to draw up a charter for a central bank. The establishment of a monetary authority became imperative a year later as a result of the findings of the Joint Philippine-American...
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...RESERVE BANK OF INDIA (RBI) INTRODUCTION: The Reserve Bank of India (RBI) is the Central Bank of the country. It was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Reserve Bank was started as share-holders bank with a paid-up capital of Rs.5 crores. On establishment it took over the function of management of currency from the Government of India and power of credit control from the Imperial Bank of India. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. PREAMBLE: The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." ORGANIZATION OF THE RESERVE BANK: 1. Central Board 2. Local Board 3. Board for Financial Supervision 4. Board for Payment and Settlement Systems 1. CENTRAL BOARD: The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. • Appointed/nominated for...
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...The central bank of the country is the Reserve Bank of India (RBI). It was established in April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of the Hilton Young Commission. The share capital was divided into shares of Rs. 100 each fully paid which was entirely owned by private shareholders in the begining. The Government held shares of nominal value of Rs. 2,20,000. Reserve Bank of India was nationalised in the year 1949. The general superintendence and direction of the Bank is entrusted to Central Board of Directors of 20 members, the Governor and four Deputy Governors, one Government official from the Ministry of Finance, ten nominated Directors by the Government to give representation to important elements in the economic life of the country, and four nominated Directors by the Central Government to represent the four local Boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi. Local Boards consist of five members each Central Government appointed for a term of four years to represent territorial and economic interests and the interests of co-operative and indigenous banks. The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank. The Bank was constituted for the need of following: • To regulate the issue of banknotes • To maintain reserves with a view to securing monetary stability and • To operate the credit...
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...Saving Banks Saving banks are established to create saving habit among the people. These banks are helpful for salaried people and low income groups. The deposits collected from customers are invested in bonds, securities, etc. At present most of the commercial banks carry the functions of savings banks. Postal department also performs the functions of saving bank. Type 2. Commercial Banks Commercial banks are established with an objective to help businessmen. These banks collect money from general public and give short-term loans to businessmen by way of cash credits, overdrafts, etc. Commercial banks provide various services like collecting cheques, bill of exchange, remittance money from one place to another place. In India, commercial banks are established under Companies Act, 1956. In 1969, 14 commercial banks were nationalised by Government of India. The policies regarding deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank. Type 3. Industrial Banks / Development Banks Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernisation of industries. In India such banks are established on a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India...
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...Established 1 April 1935 Governor Duvvuri Subbarao Central bank of India Currency Indian Rupee ISO 4217 Code INR Reserves US$300.21 billion (2010) Base borrowing rate 7.25% Base deposit rate 6.25% Website rbi.org.in Central Board The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. * Appointed/nominated for a period of four years * Constitution: * Official Directors * Full-time : Governor and not more than four Deputy Governors * Non-Official Directors * Nominated by Government: ten Directors from various fields and one government Official * Others: four Directors - one each from four local boards Functions : General superintendence and direction of the Bank's affairs Reserve Bank of India regional office, Delhi entrance with the Yakshini sculpture depicting "Prosperity through agriculture".[25] The central bank till now was governed by 21 governors . The 22nd, Current Governor of Reserve Bank of India is D. Subbarao The regional offices of GPO (in white) and RBI (in sandstone) at Dalhousie Square, Kolkata. delhi bangalore Functions [edit] Monetary authority The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates...
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...price stability conducive to a balanced and sustainable economic growth. The BSP also aims to promote and preserve monetary stability and the convertibility of the national currency. Responsibilities The BSP provides policy directions in the areas of money, banking and credit. It supervises operations of banks and exercises regulatory powers over non-bank financial institutions with quasi-banking functions. Under the New Central Bank Act, the BSP performs the following functions, all of which relate to its status as the Republic’s central monetary authority. * Liquidity Management. The BSP formulates and implements monetary policy aimed at influencing money supply consistent with its primary objective to maintain price stability. * Currency issue. The BSP has the exclusive power to issue the national currency. All notes and coins issued by the BSP are fully guaranteed by the Government and are considered legal tender for all private and public debts. * Lender of last resort. The BSP extends discounts, loans and advances to banking institutions for liquidity purposes. * Financial Supervision. The BSP supervises banks and exercises regulatory powers over non-bank institutions performing quasi-banking functions. * Management of foreign currency reserves. The BSP seeks to maintain sufficient international reserves to meet any foreseeable net demands for foreign currencies in order to preserve the international stability and convertibility of the Philippine peso...
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...are the roles and functions of central banks? Why do they need Economic staff? How far should central banks get involved in data collection and areas such as seasonal adjustment, as well as economic analysis? Introduction Though Central Bank is viewed as one of the primary mechanisms of macroeconomic stabilization there are a number of arguments about other areas of Central Bank’s involvement. This paper will explore the different areas, including the role of Central Bank in effecting monetary policy and intervening body in exchange rate trades, Central Bank as a Last Lender Resort (LLR), and Central Bank as a regulatory body of the financial sector. Prior to further discussion, it is important to stress that the role of Central Bank and the scope of its involvement may vary due to the effect of different legislations and the presence of various stakeholders. Thus, US Central Bank does not act as a regulatory body of the financial sector (Driffill et al., 2005), whereas the intervention activity of Japan Central Bank requires the approval of other governmental bodies (Fujiwara, 2005). This paper discusses the importance of Central Bank's publications of economic forecasts and other information related to Central Bank's views of the further state of macroeconomic trends. The discussion shows that this information is highly important for other market players and forecasting agencies as it reduces the information asymmetry. The role of Central bank in macroeconomic stabilization ...
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...would lead to three failed attempts to decentralized US Banking in an effort to restore trust and avoid economic disaster, after the failed attempts, The Federal Reserve Act was established in 1913 by Congress. This, at the time secured and stabilized the nation’s economy. From December 1912 to December 1913, the proposal underwent heated debates, a lot compromising, molding, and reshaping. By December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law. This was the first accepted decentralized central bank that balanced the competing interests of private banks and populist sentiment. The Federal Reserve or the “Feds” has the authority to make bank loans and back the notes printed. The purpose of the Federal Reserve System is to regulate banks and to manage the amount of money that is accessible within the economy. The Feds uses two of its tools to accomplish this, one, it can change the interest rates on the money it lends to banks. A higher interest rate makes money more expensive, thus discouraging banks to lend. Lowering interest rates causes the opposite effect. Two, they have the authority to change reserve requirements. A reserve requirement is the percentage banks must keep in their vaults of their total loan portfolio. Obviously, if the Fed lowers this requirement, the banks can increase their leverage and lend out more. By controlling...
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...| Give examples of actual enforcement actions that have been taken by the regulators chosen in (3) above. | 3 | 6 | References | 4 | 1) Describe the roles and functions of financial markets in Malaysia. Financial markets are forums in which suppliers of funds and demanders of funds can transact business directly. There are two operations of financial markets, which are primary market and secondary market. Primary market is financial market in which securities are initially issued; the only market in which the issuer is directly involved in the transaction. The function of the primary markets is to facilitate the efficient allocation of funds. Secondary market is financial market in which pre-owned securities (those that are not new issuer) are traded. There are also two key of financial markets: a)...
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...one shilling, six pence, printed in the colony of New Jersey in 1776. (Gilder Lehrman Collection) Banks are among the oldest businesses in American history—the Bank of New York, for example, was founded in 1784, and as the recently renamed Bank of New York Mellon it had its 225th anniversary in 2009. The banking system is one of the oldest, largest, and most important of our industries. Most adult Americans deal with banks, often on a fairly regular basis. Nonetheless, banks and banking seem rather mysterious. What do banks do? Why have they for so long been an integral part of our economy? Why, as in the financial crisis that commenced in 2007, do banks every so often get into trouble and create serious problems for the country? Banks have two important economic functions. First, they operate a payments system, and a modern economy cannot function well without an efficient payments system. We make most of our payments by writing checks, swiping credit cards issued by banks or tied to them, and by paying bills via online banking. Most of the money stock of the country is in fact bank money; the rest of the currency is “legal tender” issued by the government, namely Federal Reserve Notes and coins. We have confidence in bank money because we can exchange it at the bank or an ATM for legal tender. Banks are obligated to hold reserves of legal tender to make these exchanges when we request them. The second key function of banks is financial intermediation, lending or investing...
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...OF BANGLADESH BANK Abdul Awwal Sarker As regards the supervision and inspection of the banks in Bangladesh, an equal treatment is being followed for all banks including the Islamic ones by the Bangladesh Bank. In some cases, Bangladesh Bank has given some special provision for the Islamic banks. Yet, for the smooth development and operation of the Islamic banking, Bangladesh Bank should devise the separate regulatory and supervisory guidelines for the Islamic banks and non-bank Islamic financial institutions. 1. Banking System of Bangladesh The banking system of Bangladesh is composed of a variety of banks working as Nationalized Commercial Banks (NCBs), Private Banks, Foreign Banks, Specialised Banks and Development Banks. However, 28 out of 50 banks in Bangladesh are private, of which only 5, namely Islami Bank Bangladesh Limited, Al-Baraka Bank Bangladesh Limited, Al-Arafah Islami Bank Limited, Social Investment Bank Limited, and Faysal Islamic Bank of Bahrain E.C. have been operating as Islamic banks. Besides these full-fledged Islamic banks, two conventional banks in the private sector namely the Prime Bank Limited and Dhaka Bank Limited, have opened two full-fledged Islamic banking branches and Islamic Banking Counter respectively to deal with the Islamic banking business parallel to their conventional operations. The operations and accounts of these branches and counter are maintained separately from the mainstream business of the respective banks. 2. The Genesis...
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...1. Introduction to the Organization The banking sector remains always the most dominant sector of the financial sector. Hatton National Bank PLC (HNB) is Sri Lanka’s second largest private sector bank in terms of assets (behind Commercial Bank of Ceylon) and is the fourth largest amongst all banks (after accounting for the two state banks, Bank of Ceylon and Peoples’ Bank). HNB accounts for 10% of banking system assets. HNB provides a broad range of banking products and services in the areas of; Corporate Banking, Small and Medium Size Enterprise Banking, Trade Finance, Retail and Consumer Banking, Asset Leasing, Loan Syndication and Project Finance. HNB has an AA- credit rating from Fitch Ratings Lanka Limited, Sri Lanka’s main rating agency. HNB has been acknowledged globally by The Asian Banker as the Best Retail Bank in Sri Lanka for Six consecutive years for its performance from the year 2007 to 2012. The HNB umbrella of today has two local subsidiaries - HNB Assurance and Acuity Partners. HNB have been established for more than 120 years. Their ethos are so simple for its survival even in turbulent times. HNB remain firm in their belief that they must continue to be banking partner in the lives of the Sri Lankan people. HNB has put in place an effective Risk Management System with clearly stated procedures, utilizing various committees that constitutes senior management personnel with requisite expertise/experience. 1. Identifying Retail Banking Sector...
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...Reserve Bank of India: Functions and Working RESERVE BANK OF INDIA www.rbi.org.in ž¸¸£·¸ú¡¸ ¹£ö¸¨¸Ä ¤¸ÿˆ 2 Foreword The Reserve Bank of India, the nation’s central bank, began operations on April 01, 1935. It was established with the objective of ensuring monetary stability and operating the currency and credit system of the country to its advantage. Its functions comprise monetary management, foreign exchange and reserves management, government debt management, financial regulation and supervision, apart from currency management and acting as banker to the banks and to the Government. In addition, from the beginning, the Reserve Bank has played an active developmental role, particularly for the agriculture and rural sectors. Over the years, these functions have evolved in tandem with national and global developments This book aims to demystify the central bank by providing a simple account of the Reserve Bank’s operations and the multidisciplinary nature of its functions. The Bank today focuses, among other things, on maintaining price and financial stability; ensuring credit flow to productive sectors of the economy; managing supply of good currency notes within the country; and supervising and taking a lead in development of financial markets and institutions. The book serves to highlight how the Reserve Bank’s decisions touch the daily lives of all Indians and help chart the country’s economic and financial course. We hope that readers would find the book...
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...Harvard Law School Jean Monnet Chair Professor J.H.H. Weiler Harvard Jean Monnet Working Paper 1/01 Päivi Leino The European Central Bank and Legitimacy Is the ECB a Modification of or an Exception to the Principle of Democracy? Harvard Law School Cambridge, MA 02138 All rights reserved. No part of this paper may be reproduced in any form Without permission of the author. © Päivi Leino 2000 Harvard Law School Cambridge, MA 02138 USA The European Central Bank and Legitimacy Is the ECB a Modification of or an Exception to the Principle of Democracy? Päivi Leino, Åbo Akademi University( M.Pol.Sc. (international law), Åbo Akademi University, Finland; LL.M. candidate, London School of Economics and Political Science. This paper was concluded on August 8, 2000 and subsequent changes have not been considered. The author would like to thank Professor Markku Suksi and Lic.Pol.Sc. Kurt Långkvist for their comments and encouragement. The author has exclusive responsibility for all views, errors and omissions. Comments are invited to Paivi.Leino@abo.fi.) 1. The Sovereign of Monetary Policy The creation of a single market and the continuing concentration and integration at the European level have created phenomena that can neither be governed by nationally based policies nor left to the working of unregulated markets.( Hirst, Paul and Thompson, Grahame (1996), p. 156.) According to the European Court of Justice...
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