Reserve Bank of India
Reserve Bank of India: The Reserve Bank of India is the central bank of India which is responsible for regulating the Indian banking system. It is responsible for managing a state’s currency, money supply, and interest rates. RBI is a statutory body established in the year 1935 under the Reserve Bank of India Act, 1934. RBI, the central bank plays the role of the bankers’ bank and regulates the Indian banking sector. The main functions of the RBI includes the issuance of currency, sustaining monetary stability in India, operating the currency, and maintain the country’s credit system.
Reserve Bank of India Governor
The governor of the Reserve Bank of India is the chief executive officer of India’s central bank and the ex-officio chair of its Central Board of Directors. The first governor of RBI was Osborne Smith 1935 and the first Indian Governor of the Reserve Bank of India was C.D. Deshmukh. Shaktikanta Das is the current governor of RBI for a period of three years. RBI Governor is responsible for maintaining monetary stability in an economy. Thus, he plays an important role in shaping the policies of the Reserve Bank of India.
Reserve Bank of India established
The Government of India established the Reserve Bank of India (RBI) in 1935 by the Reserve Bank of India Act (1934). RBI was originally privately owned and was nationalized in 1949. The central bank is headquartered in Mumbai and maintains offices throughout the country. The four local boards, headquartered in Mumbai, Kolkata, Chennai, and New Delhi, advise the central board on regional issues and represent the interests of regional banks. The government appoints all the members of the central and local boards for terms of four years.
State the role of Reserve Bank of India
Reserve Bank of India plays an important role in managing a state’s currency and money supply. RBI regulates the issuance of Bank Notes and keeping of reserves to secure monetary stability in the country and operates the currency and credit system of the country to its advantage. The RBI regularly issue directions to the commercial banks to lend loans to small-scale industrial units. RBI also organize promotional functions that support national objectives which encourage rural and agricultural economic development.
Reserve Bank of India Headquarters
The Reserve Bank of India is headquartered in Mumbai. The central bank was initially established in Kolkata but was permanently moved to Mumbai in 1937.
Functions of Reserve Bank of India
The main functions of Reserve Bank of India are mentioned below
- Monitoring the monetary policies
- Implementing monetary policies.
- Ensuring price stability in the country
- RBI determines the comprehensive parameters of banking operations such as:
- License issuing
- Liquidity of assets
- Bank mergers
- Branch expansion, etc.
Foreign Exchange Management
- RBI manages the FOREX Reserves of India.
- The central bank is responsible for maintaining the value of the Rupee outside the country.
- RBI aids foreign trade payment.
Issue of currency
- The central bank of India is responsible for providing the public with a sufficient supply of currency notes and coins.
- RBI also takes care of the quality of currency notes and coins.
- RBI is in charge of issuing and exchanging of currency and coins.
Reserve Bank of India- FAQs
Q. When was the Reserve Bank of India established?
Ans. The Reserve Bank of India was established in 1935 by the Reserve Bank of India Act (1934).
Q. Where is the headquarter of RBI?
Ans. The headquarter of RBI is located in Mumbai.
Q. What is the main function of RBI?
Ans. The main function of RBI includes the issuance of currency, sustaining monetary stability in India, operating the currency, and maintain the country’s credit system.