The Reserve Bank of India is the apex bank in our country. Hence when an aspirant starts preparing for Banking Awareness Section, A few details about RBI become a necessity to have at your finer tips. Here in this article, we have covered all the points which is expected from a competitive exam aspirant to know. These points will especially be handy for exams like SBI PO & Clerk, RBI Assistants, IBPS PO & CLERk and RRBs.
rbi – iNDIA’S CENTRAL bANK
A central bank, reserve bank, or monetary authority is an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. The key functions differ from country to country, however in India RBI is the central banking institution, which controls the monetary policy of the Indian rupee.
- Commission – RBI was set up based on the recommendation of “Royal Commission on Indian Currency & Finance” in 1926. This commission was also known as Hilton Young Commission.
- Act – It was formed under the Reserve Bank of India Act, 1934.
- Year – It commenced its operations on 1st April, 1935.
- Headquarters – Initially the headquarter of RBI was in Calcutta (Now Kolkata) but in 1937 it was permanently moved to Mumbai, Maharastra.
- Nationalisation – Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.
- Sole Authority – RBI is the sole authority in India to issue Bank notes in India. The currency notes have their denominations written in 15 languages. However, One rupee notes are printed by the Government of India.
- Minimum Reserve Requirements – RBI can issue currency notes as much as the country requires, provided India has the security deposit of Rs. 200 Crores, out of which 115 crores must be in gold and 85 crores must be in forex reserves.
- Zonal Offices – RBI has four zonal offices : New Delhi for North, Chennai for South, Kolkata for East and Mumbai for West.
- Regional Offices – The Reserve Bank of India has 20 regional offices, most of them in state capitals and 11 Sub-offices.
Functions of rbi
- Monetary Authority:
- Formulates, implements and monitors the monetary policy.
- Objective: maintaining price stability while keeping in mind the objective of growth.
2. Regulator and supervisor of the financial system:
- 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.
3. Manager of Foreign Exchange
- 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.
4. Issuer of currency:
- 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.
5. Developmental role
- Performs a wide range of promotional functions to support national objectives.
6. 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.
structure of rbi
RBI is controlled by a central board of directors. The directors are appointed for a 4 year term by the Government of India in keeping with the Reserve Bank of India Act. The general superintendence and direction of the RBI is entrusted with 21-member Central Board of Directors.
The Central Board consists of:
- Governor – 1
- Deputy Governors – 4 (max)
- Finance Ministry representatives – 2
- Directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi – 4
- Government-nominated directors to represent important elements from India’s economy – 10
current governor & deputies:
other points related to governors:
- Chintaman Dwarkanath Deshmukh (C D Deshmukh) was the governor of RBI at the Time of nationalization of RBI in 1949.
- C D Deshmukh, then Governor of RBI, represented India at the Bretton Woods negotiations in 1944
- First women Deputy Governor of RBI -K.J.Udeshi.
- The only Prime Minister who was the Governor of RBI was Manmohan Singh (1982 – 1985).
RBi – A look back
- 1926 – Hilton and Young Commission
- 1934 – RBI Act passed
- 1935 – RBI Started April 1
- 1937 – RBI Head Quarter shifted to Mumbai from Kolkata
- 1947 – RBI Official News paper ” News Letter ” started
- 1947 – RBI working as Reserve Bank of Burma Until 1947
- 1948 – RBI working as Reserve Bank of Pakistan Until 1948
- 1949 – RBI Nationalized Under Public Ownership Act 1948
- 1949 – Banking Regulation Act