About Reserve Bank of India
- RBI is an institution of national importance and the pillar of the surging Indian economy.
- Reserve Bank of India was based on the strategies formulated by Dr. Ambedkar in his book named “The Problem of the Rupee – Its origin and its solution”.
- It regulates the credit and currency system in India.
- The chief objectives of RBI are to sustain the confidence of the public in the system, protect the interests of the depositors, and offer cost-effective banking services like cooperative banking and commercial banking to the people.
Organizational Structure of Reserve Bank of India (RBI)
Central Board of Directors
- Reserve Bank's affairs are governed by the central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
- The board of directors is appointed/nominated for a period of four years.
- The Central Board consists of:
- 4 Deputy Governors
- 2 Finance Ministry representatives
- 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai, and New Delhi
- The executive head of RBI is Governor.
- Governor is accompanied by 4 deputy governors.
- Zonal Offices: RBI has four zonal offices:
- New Delhi for North,
- Chennai for South,
- Kolkata for East and
- Mumbai for West.
- RBI has 19 regional offices and 11 sub-offices at present.
- RBI has two training colleges for its officers:
- Reserve Bank Staff College at Chennai
- College of Agricultural Banking at Pune.
Check Related: RBI Grade B
Reserve Bank of India History
The Reserve Bank of India was founded and established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934 on the recommendations of the Hilton Young Commission. The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935.
The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
The Bank was constituted basically for the following functions:
- Regulate the issue of banknotes
- Maintain reserves with a view to securing monetary stability
- To operate the credit and currency system of the country to its advantage
The Bank began its operations by taking over from the Government the functions so far being performed by the Controller of Currency and from the Imperial Bank of India, the management of Government accounts and public debt. The currency offices of that time at Calcutta, Bombay, Madras, Rangoon, Karachi, Lahore, and Cawnpore (Kanpur) became branches of the Issue Department. Offices of the Banking Department were established in Calcutta, Bombay, Madras, Delhi, and Rangoon.
In 1937, Burma (Myanmar) seceded from the Indian Union but the Reserve Bank continued to act as the Central Bank for Burma till the Japanese Occupation of Burma and later upto April 1947. After the partition of India, the Reserve Bank served as the central bank of Pakistan up to June 1948 when the State Bank of Pakistan commenced operations. The Bank, which was originally set up as a shareholder's bank, was nationalized in 1949.
Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.
RBI was playing a special role in the context of development, especially Agriculture since its inception. When India commenced its plan endeavors, the development role of the Bank came into focus, especially in the sixties when the Reserve Bank, in many ways, pioneered the concept and practice of using finance to catalyze development.
The Bank was also instrumental in institutional development and helped in setting up institutions to build the financial infrastructure of the country like:
- Deposit Insurance and Credit Guarantee Corporation of India,
- Unit Trust of India,
- Industrial Development Bank of India,
- National Bank of Agriculture and Rural Development,
- Discount and Finance House of India etc.
With liberalization, the Bank's focus has shifted back to core central banking functions like Monetary Policy, Bank Supervision, and Regulation, and Overseeing the Payments System and onto developing the financial markets.
Quick Facts Related to RBI
- The First Governor of RBI was Sir Osborne Smith and the First Indian Governor of RBI was CD Deshmukh.
- The First woman Deputy Governor of RBI was KJ Udeshi.
- The only Prime Minister who was the Governor of RBI was Manmohan Singh.
- Present Governor of RBI: Shaktikanta Das
- Shaktikanta Das was the 25th Governor of RBI
- Present Deputy Governors of RBI (There are generally 4 Deputy Governor of RBI)
- Rabi Sankar
- Rajeshwar Rao
- M. D. Patra
- M. K. Jain
- The RBI is also called “Bank of Issue”.
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