Reserve Bank of India (RBI):
The Reserve Bank of India (RBI) is the central institution of India which handles the monetary policies of India. It maintains the economic stability and growth of India.
The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission. It was established on April 1, 1935 in accordance with the provisions of 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 Governor of RBI sits at the Central Office and formulates monetary policies.
Reserve Bank of India was nationalised in the year 1949 and is fully owned by the Government of India.
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."
Formulates, implements and monitors the monetary policy.
Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.
Prescribes broad parameters of banking operations within which the country's banking and financial system functions.
Objective: maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public.
Manages the Foreign Exchange Management Act, 1999.
Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
Issues and exchanges or destroys currency and coins not fit for circulation.
Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
Performs a wide range of promotional functions to support national objectives.Related Functions:
Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
Banker to banks: maintains banking accounts of all scheduled banks.
Important facts on Reserve Bank of India
|RBI was established in the year||01 Apr 1935|
|RBI was nationalised in the year||1949|
|RBI was established in accordance with the provisions of the||Reserve Bank of India Act, 1934|
|The first Governor of RBI was||Sir Osborne Smith|
|The first Indian Governor of RBI was||CD Deshmukh|
|The Headquarter of RBI is in||Mumbai|
|The RBI Governor is appointed for the period of||5 years|
|Which section of the Reserve Bank of India Act, 1934, provides that there shall be one Governor and not more than four Deputy Governors to be appointed by the central government on the central board of RBI?||Section 8(1)(a)|
|Current Governor of RBI is (As on January 2017)||Urjit Patel|