Reserve Bank of India (RBI) Governor D. Subba Rao turned a teacher to give simple lessons on the role of the central bank to about 500 students of a rural-based government school in Karnataka.
As part of RBI’s platinum jubilee (1935-2009) celebrations, Mr. Rao held an hour-long class on Tuesday in Doddaballavangala village in Bangalore Rural district, about 60 km from India’s tech hub.
“RBI is not a normal bank in the popular sense. We are also a bank by name but different from State-run banks, regional rural banks and cooperative banks. We are associated with issuing currency notes and coins,” Mr. Rao told the curious students, many of whom were in their school uniform.
When Mr. Rao asked how many of the students have known or seen a bank, about 100 hundred hands went up in the audience. But when he asked how many have known or heard about RBI, not a single hand went up though a couple of their teachers raised their hands.
“When I was of your age (10 -15 years), I had not even seen a bank or gone inside one. You are lucky because you have an opportunity to walk into a bank in your own village,” Mr. Rao said, drawing a thunderous applause from the boys and girls.
With an interpreter translating his English speech into Kannada, Mr. Rao explained that besides issuing currency notes and coins, the other important function of the RBI was to maintain price stability to ensure inflation did not get out control.
“Maintaining price stability means if you bought an exercise notebook at Rs. 12 last year and for Rs. 14 this year, the rate of increase by Rs. 2 is inflation. Our responsibility is to ensure it (inflation) is in acceptable limits,” Mr. Rao pointed out.
Listing out other functions of the central bank, Mr. Rao told the students that the RBI worked with the Central and State governments to reduce poverty by supporting the economic growth of the country. “We ensure sufficient money supply within reasonable limits to support growth. We facilitate and regulate the movement of money from banks to people, companies and institutions and vice-versa,” Mr. Rao said.
Highlighting its fourth important role, Mr. Rao said the RBI ensured financial stability by guaranteeing that the money kept by people and businesses in banks under its supervision were safe.
Releasing three colourful books on banking, brought out by the regional office of the RBI in Kannada, Mr. Rao said the books would become part of the school curriculum for students of Class 5, 7 and 9.
“As you grow, pass out of school, join a college and become adults to take jobs, you need to know what a bank does and understand the banking system,” Mr. Rao said.
To commemorate the central bank’s 75th year, Mr. Rao said the RBI would hold a competition in schools across Karnataka for students on the “role and functions of RBI.”
“We will award cash prizes for the best three essays. The prizes will be distributed by the Chief Minister (B.S. Yeddyurappa) in March 2010.”
Mr. Rao also directed the central bank’s regional office to hold an essay contest in the village ‘On the functions of RBI’ within 10 days. “Cash prizes of Rs. 5,000, Rs. 3,000 and Rs. 2,000 will be given to the best three essays on October 2 to mark Gandhi Jayanti,” he added.
Mr. Rao was on a day’s visit to Bangalore to launch the central bank’s outreach programme to achieve 100 percent financial inclusion in the country through financial literacy at the earliest.