Introduction:
The Reserve Bank of India (RBI) is the central banking institution in India, responsible for the supervision and regulation of the country's banking system. It plays a crucial role in ensuring the stability and smooth functioning of banks in India. The RBI supervises banks through various mechanisms and regulations to safeguard the interests of depositors and maintain the overall health of the banking sector.

1. Licensing and Authorization:
The RBI has the authority to grant licenses to banks for carrying out banking operations. It carefully evaluates the applications for banking licenses, ensuring the applicants meet the necessary criteria and have the required capital adequacy. This helps in maintaining a strong and reliable banking system.

2. Regulatory Framework:
The RBI establishes a regulatory framework that banks must adhere to. It formulates and implements various regulations, guidelines, and policies to govern the functioning of banks in India. These regulations cover areas such as capital adequacy, risk management, asset quality, liquidity, governance, and more. Banks are required to comply with these regulations to maintain sound financial health.

3. On-site Inspections:
The RBI conducts regular on-site inspections of banks to assess their financial health, risk management practices, compliance with regulations, and overall performance. These inspections involve a detailed examination of the bank's books, records, internal controls, and processes. The RBI identifies any weaknesses or irregularities and takes appropriate action to rectify them.

4. Off-site Surveillance:
In addition to on-site inspections, the RBI also performs off-site surveillance of banks. It collects and analyzes data from banks to monitor their performance, financial stability, and risk exposure. This helps in identifying any potential issues or vulnerabilities in the banking system and allows the RBI to take proactive measures to address them.

5. Prompt Corrective Action:
The RBI has the power to initiate prompt corrective action (PCA) against banks that are financially weak or facing significant risks. PCA is a structured program that includes various measures such as capital infusion, asset quality review, restricting lending activities, management changes, and more. It aims to prevent further deterioration of the bank's financial health and protect the interests of depositors.

6. Reporting and Disclosure:
Banks are required to submit regular reports and disclosures to the RBI. These reports provide detailed information about the bank's financial position, risk profile, lending practices, asset quality, and more. The RBI analyzes these reports to assess the banks' performance, identify any areas of concern, and take appropriate actions if required.

Conclusion:
The Reserve Bank of India plays a significant role in supervising the functioning of other banks in the country. Through licensing, regulatory frameworks, on-site inspections, off-site surveillance, prompt corrective action, and reporting requirements, the RBI ensures that banks operate in a safe and sound manner. This supervision helps maintain the stability and integrity of the banking system, protecting the interests of depositors and promoting overall economic growth.

RBI full form is Reserve Bank of India and it is the central bank of the  India. RBI supervises the functioning of formal sources of loans in India.

Functions of RBI

1.Printing and controlling of currency, RBI  prints the currency and control the distribution and uses in the economy.

2.RBI is the banker of all the banks.

3.RBI makes monitory policy.

4.RBI control the inflation in the country.

5.RBI controls foreign exchange(forex).

6.RBI is also the bank to the government.

Hope this will be helpful :)