The Reserve Bank of India is India’s central banking institution, which controls the monetary policy of the Indian rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934. The original share capital was divided into shares of 100 each fully paid, which were initially owned entirely by private shareholders. Following India’s independence on 15 August 1947, the RBI was nationalised on 1 January 1949.
The RBI plays an important part in the Development Strategy of the Government of India. It is a member bank of the Asian Clearing Union. The general superintendence and direction of the RBI is entrusted with the 21-member Central Board of Directors: the Governor, 4 Deputy Governors, 2 Finance Ministry representatives, 10 government-nominated directors to represent important elements from India’s economy, and 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these local boards consists of 5 members who represent regional interests, and the interests of co-operative and indigenous banks.
A Central Bank is an independent apex monetary authority which regulates banks, and provides important financial services like storing of foreign exchange reserves, control of inflation, monetary policy report. A Central Bank is known by different names in different countries. The functions of a Central Bank vary from country to country and are autonomous or quasi autonomous body and perform or through another agency vital monetary functions in the country. A central bank is a vital financial apex institution of an economy and the key objects of central banks may differ from country to country still they perform activities and functions with the goal of maintaining economic stability and growth of an economy.
The bank also active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion (AFI).
The bank is often referred to by the name Mint Street.
- Financial Supervision
- Regulator and supervisor of the financial system
- Managerial of exchange control
- Issue of currency
- Banker’s bank
- Detection of fake currency
- Consist of 21 members
- It plays an important part in the development strategy of the Govt. of India.
- Share capital fully paid initially owned by private shareholders.
- It regulate, control & inspects the bank in India .
- Providing license to New Banks.
- Member bank of the Asian Clearing Union.
- Nationalized in 1st Jan,1949.
- 1 Apr,1935 during the British Raj under RBI ACT 1934.
- Controls Monetary policy of the Indian rupee.
- India’s central banking institution/authority.
4 Deputy Governor
2 Finance Ministry Representative
10 Govt. nominated directors to represent important elements from India’s economy
4 Directors to represent local boards
- The RBI logo was inspired from the East India Company Double Mohur.
- It was formed on April 1, 1935 as a private entity, but is a government entity now. Nationalization of the central bank did not happen till 1949.
- The financial year of RBI is from 1 July to 30 June.
- RBI is responsible only for printing the currency notes. Minting of coins is done by the Government of India.
- The first woman to become the deputy governor of RBI is K. J. Udeshi. She was appointed in 2003.
- RBI demonetized notes in the denominations of five thousand rupees (Rs. 5,000) and ten thousand rupees (Rs. 10,000) in 1938. They were reintroduced in 1954 and again demonetized in 1978. RBI can print these notes according to the RBI act of 1934.
- RBI was also the central bank for two other countries. It played the role of Central Bank of Pakistan till June 1948 and the Central Bank of Burma ( Myanmar) till April 1947.
- The bank was established on the recommendation of the Hilton Young Commission.
- RBI does not have second class employees. It has 17000 Class I, Class III & Class IV employees.
- Manmohan Singh is the only Prime Minister to have also served as the Governor of RBI. He was the Governor of RBI from 1982-1985.
- The first Indian to hold the position of the Governor of RBI was Mr. C.D. Deshmukh. He was the third governor of RBI. In his tenure, RBI transitioned from a shareholder’s institution to a state-owned organization. He was, however, against the nationalization of banks.
- RBI has 29 offices in India which are mostly located in the state capitals.
- RBI runs a Monetary Museum in the premises of the Mumbai head office.