The Reserve Bank of India (RBI) is the central bank of India, which was established on April 1, 1935, under the Reserve Bank of India Act, 1934
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.
Formed on the recommendation of Hilton Young Commission.
Preamble of bank
“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; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth.”
The RBI originally started as a private entity but was nationalized in 1949. The reserve bank is governed by a central board of directors appointed by the national government.
Appointed/nominated for a period of four years
Full-time: Governor and not more than four Deputy Governors
Nominated by Government: ten Directors from various fields and two government Official
Others: four Directors – one each from four local boards
After the independence of India, it was nationalized in 1949.
The first governor of RBI was Sir Osborne Smith (1935-1937).
The first Indian governor was CD Deshmukh (1943-1949).
Manmohan Singh is the only Prime Minister who also was a Governor of RBI.
Current Governor is Urjit Patel.
Runs two training colleges-Reserve Bank Staff College at Chennai and College of Agricultural Banking at Pune.
Its financial year is from 1 July to 30 June.
The emblem of RBI is a tiger and a Palm tree.
RBI acted as the central bank for Burma till April 1947 and for Pakistan till June 1948.
SOME IMPORTANT FUNCTIONS
RBI regulates the credit and currency system in India.
It is the main monetary authority of India.
It maintains public confidence in the banks, protects depositors interest and provides cost-effective banking services to the public.
It is solely responsible for creating notes of all domination. The coins are minted by Government of India but its circulation is controlled by RBI.
It acts as a central bank for the other commercial banks. It also helps in interbank fund transfer.
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