Reser

veBankofI
ndi
a

TheReserveBankofIndi
a(RBI )i
sthecentr
albankofIndi
a,andwasestabl
i
shedonApril1,1935in
accor
dancewiththeprovi
sionsoft heReserveBankofIndi
aAct,1934.Si
nceit
sincepti
on,ithas
beenheadquar
ter
edinMumbai .Thoughori
ginal
l
ypri
vatel
yowned,RBIhasbeenful
l
yownedbyt he
Gover
nmentofIndiasi
ncenational
izat
ioni
n1949.

RBIisgover
nedbyacent r
alboard(headedbyaGov er
nor
)appoint
edbyt
heCentr
alGover
nment.
Thecurr
entgover
norofRBIisDr.
Y.VenugopalReddy(
whosucceededDr
.Bi
malJal
anonSeptember
6,2003)
.RBIhas22regi
onalof
fi
cesacrossIndia.

TheReser
veBankofIndiawassetuponther ecommendati
onsoftheHil
tonYoungCommissi
on.
Thecommissi
onsubmit
tedi
tsrepor
tint
heyear1926,
thoughthebankwasnotsetupf
orni
neyear
s.

Mai
nobj
ect
ives

Monet aryAuthor i
ty:For mul ates, i
mpl ement sandmoni torsthemonet arypol icy.
Object ive:maintainingpr icest abili
tyandensur i
ngadequat eflowofcr edi tt
opr oductivesectors.
Regul atorand super visoroft he f i
nancialsy stem:Pr escri
bes br oad par ameters ofbanki ng
oper ationswithinwhi cht hecount ry
'sbanki ngandf inancialsystem funct i
ons.
Object ive:maintainpubl i
cconf i
dencei nthesy st em,pr otectdeposi tors'i
nt erestandpr ovi
decost -
effect i
vebankingser v i
cest ot hepubl ic.
ManagerofExchangeCont rol: Managest heFor eignExchangeManagementAct ,
1999.
Object ive:tof acili
tate ext er nalt rade and pay mentand pr omot e or derly dev el
opmentand
mai ntenanceoff oreignexchangemar ketinIndia.
Issuerofcur rency :Issuesandexchangesordest roy scurrencyandcoi nsnotf itforcir
culati
on.
Object ive:t
ogi vet hepubl i
cadequat equant it
yofsuppl i
esofcur rencynot esandcoi nsandi ngood
qual i
ty.
Dev elopment alrole: Per formsawi der angeofpr omot i
onal f
unctionst osuppor tnationalobjecti
ves.
RelatedFunct ions:
Bankert otheGov ernment :per formsmer chantbanki ngf unctionf ort hecent r
alandt hest ate
gov ernment s;alsoact sast heirbanker .
Bankert obanks: mai nt ainsbanki ngaccount sofal l
schedul edbanks.
Ownerandoper at oroft hedeposi t
ory( SGL)andexchange( NDS)f orgov ernmentbonds.
Ther ei snowani nternat ionalconsensusaboutt heneedt of ocust het asksofacent r
albankupon
cent ralbanking.RBIi sf aroutoft ouchwi t
hsuchapr i
nciple,owi ngt ot hespr awlingmandat e
descr ibedabov e.

BombaySt
ockExchange

TheBombaySt
ockExchangeLimit
ed(for
merl
y,TheStockExchange,Mumbai;popul
arl
ycal
l
edThe
BombaySt
ockExchange,orBSE)i
slocat
edatDalalStr
eet
,Mumbai .Est
abl
ishedin1875,i
tist
he
oldeststockexchangei nAsi a.Therear earound3,500Indiancompani esl i
stedwiththest ock
exchange,andhasasi gnifi
canttradingvolume.AsofJuly2005,t
hemar ketcapi
tali
zat
ionoftheBSE
wasaboutRs.20t ri
ll
ion( US$466bi l
li
on).TheBSESENSEX( SENSi t
iveindEX),alsocal
ledtheBSE
30,isawi del
yusedmar ketindexi nIndi
aandAsi a.Asof2005,i tisamongt he5bi ggeststock
exchangesinthewor l
di nt er
msoft ransacti
onsvol
ume.Alongwi t
ht heNSE,t hecompani esli
sted
ont heBSEhaveacombi nedmar ketcapi
tali
zati
onofUS$125.5bil
li
on.

Hi
stor
y

Ani nf
ormalgr oupof22stockbroker
sbegant r
adingunderabany antreeopposi
tetheTownHallof
Bombayf rom themid-
1850s,eachinvest
inga( then)pri
ncelyamountofRupee1.Thi sbanyant
ree
sti
llstandsint heHornimanCi r
clePark,Mumbai .Theinformalgroupofstockbr
okersorgani
zed
themsel v
esast heTheNativeShareandSt ockbroker
sAssoci at
ionwhich,i
n1875,wasf ormall
y
organizedastheBombaySt ockExchange( BSE).

I
nJanuary1899,thestockexchangemovedintotheBr
okers� Hal
laft
eritwasinaugrat
edbyJames
M Macl
ean.AftertheFirstWorl
dWar,t
heBSEwasshi f
tedtoanoldbuil
dingneartheTownHal l
.In
1928,t
heplotofl andonwhi chtheBSEbui l
dingnow st
ands(attheinter
secti
onofDalalStreet
,
BombaySamacharMar gandHammam St reetindowntownMumbai )wasacquired,andabuil
ding
wasconstr
uctedandoccupiedin1930.

Pr emchand Roychand wasaleadi

ng st
ockbr
okeroft
hatti
me,and heassi
sted i
nsetti
ng out
tradit
ions,conv
enti
ons,andpr
ocedur
esforthetr
adi
ngofst
ocksatBombayStockExchangeand
theyar esti
ll
bei
ngf ol
l
owed.

Severalstockbrokingfir
msinMumbaiwer ef
ami
lyrunenter
pri
ses,
andwerenamedaftert
heheads
ofthef amil
y.Thef oll
owingisthelistofsomeoftheini
ti
almembersoft
heexchange,andwhoare
st
il
lrunningthei
rr especti
vebusiness.

D.S.Prabhudas&Company( nowknownasDSP, andajoi

ntventurepar
tnerwi
thMer
ri
llLy
nch)
JamnadasMor arj
ee(nowknownasJM)
Champakl alDevi
das( nowcal l
edCifcoFinance)
Bri
jmohanLaxmi naray an
In 1956,theGov er
nmentofI ndi
ar ecogni
zed theBombaySt ockExchangeast hefir
stst
ock
exchangei nthecountryundertheSecur i
ti
esCont r
act
s(Regulat
ion)Act
.

TheBSEmov edintoi t
scur r
entpremi ses-t hePhir
ozeJeejeebhoyTowers-in1980.TheBombay
StockExchangef ol
lowedt hef amili
arout crysystem f
orst ocktradi
ngupunt i
l1995,wheni twas
repl
acedbyanel ectroni
c( eTradi
ng)sy stem.I n2005,thestatusoftheexchangechangedf rom an
Associati
onofPer sons( AoP)t oaf ullfledgedcorporat
ionundert heBSE( Corporat
izat
ionand
Demut ual
izat
ion)Scheme,2005 ( and itsnamewaschanged t o TheBombaySt ockExchange
Limit
ed).

BSESensex

TheBSESENSEX(
alsoknownast
heBSE30)i
sav
alue-
wei
ght
edi
ndexcomposedof30scr
ips,
wit
h
thebaseApril1979=100.Thesetofcompani
eswhi
chmakeupt hei
ndexhasbeenchangedonl
ya
few ti
mesi nt helast20year
s.Thesecompaniesaccountf
oraroundone-f
if
thoft hemarket
capi
tal
izat
ionoftheBSE.

Nat
ionalSt
ockExchangeofI
ndi
a

TheNat i
onalStockExchangeofIndi
a( NSE),i
soneoft helar
gestandmostadvancedstockmarket
s
i
nIndia.TheNSEi sthewor l
d'
sthir
dlargeststockexchangeinter
msoftransact
ions.I
tisl
ocat
edin
Mumbai ,t
hefinanci
alcapit
alofI
ndia.TheNSEVSATt erminal
s,2799i
ntotal(
31stDecember2005),
cover320citi
esinIndi
a.

Or
igi
ns

TheNat i
onalStockExchangeofI ndiawaspr omot edbyleadingFinanci
alI
nstit
ut i
onsatthebehest
oftheGov ernmentofI ndia,andwasi ncorporatedinNov ember1992asat ax-payingcompany.In
Apri
l1993,itwasr ecognizedasast ockexchangeundert heSecuri
ti
esContracts( Regul
ati
on)Act,
1956.NSEcommencedoper at
ionsintheWhol esal
eDebtMar ket(
WDM)segmenti nJune1994.The
CapitalMarket(Equit
ies)segmentoft heNSEcommencedoper ati
onsinNov ember1994,whi l
e
operati
onsintheDerivati
vessegmentcommencedi nJune2000.

I
nnov
ati
ons

NSEhasremainedinthef
oref
rontofmoder
nizat
ionofI
ndi
a'
scapi
talandf
inanci
almar
ket
s,andi
ts
pi
oneer
ingef
fort
sincl
ude:

Co-promoti
ngandsetti
ngupofNational
Securi
ti
esDeposi
tor
yLimi
ted,
fir
stdeposi
toryi
nIndia.
Setti
ngupofS&PCNXNi f
ty.
NSE pioneered commencementofI nt
ernetTradi
ng i
n Febr
uar
y2000,whi ch led t
ot he wi
de
popular
izat
ionoftheNSEinthebr
okercommunity.