Reserve Bank of India

Reserve Bank of India is the central banking institution, which regulates the monetary policy of the Indian rupee. Under the Reserve Bank of India Act, 1934, RBI was established on 1st April 1935. RBI is not a Commercial Bank. The Central Office of RBI was primarily established in Calcutta and then permanently moved to Mumbai in 1937.

RBI is an institution of national importance and the pillar of surging Indian economy. It is a member of IMF. Recently, RBI has launched a website named ww.paisaboltahai.rbi.org.in. to raise awareness among masses about fake notes in the market. UPSC has asked several questions regarding RBI functions, objectives, monetary regulations etc. especially in UPSC IAS Prelims Exam.  

CONCEPT OF RBI

• The concept of Reserve Bank of India was conceptually based on the strategies formulated by Dr. Ambedkar in his book named “The Problem of the Rupee – Its origin and its solution”.
• This central banking institution was established based on the suggestions of “Royal Commission on Indian Currency & Finance” in 1926. This commission was also known as Hilton Young Commission.
• In 1949 the Reserve Bank of India was nationalized and is a member bank of the Asian Clearing Union.
• RBI regulates the credit and currency system in India.

PREAMBLE

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.”

MAIN FUNCTIONS OF RBI

• Monetary Authority
• Regulator and administrator of the financial system
• Managing Foreign Exchange
• Issuer of currency
• Developmental role

COMPOSITION OF RBI

• Reserve Bank of India 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 Central Board consists of:
• Governor
• 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.
• The Governor is accompanied by 4 deputy governors.
• The First Governor of RBI was Sir Osborne Smith and the First Indian Governor of RBI was CD Deshmukh.
• The First women deputy Governor of RBI was KJ Udeshi.
• The only Prime Minister who was the Governor of RBI was Manmohan Singh.

EMBLEM AND LOGO

• Panther and Palm tree is the emblem of Reserve Bank of India. It was derived from East India Company Double Mohur.
• The logo Reserve Bank of India is fully owned by the Government of India.

ZONAL OFFICES

• RBI has four zonal offices: New Delhi for North, Chennai for South, Kolkata for East and Mumbai for West.
• The Reserve Bank of India has 19 regional offices and 11 sub-offices at present.
• The bank has two training colleges for its officers:
  • Reserve Bank Staff College at Chennai
  • College of Agricultural Banking at Pune

CURRENCY

• Contemporary Currency notes have 15 languages in the back side panel.
• The Government of India is responsible for the minting of coins and printing of 1 rupee notes.
• RBI is the individual authority in India that can issue bank notes of denomination values of Rs. 2, 5, 10, 20, 50, 100, 2000, 5000 and 10,000.

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