The Reserve Bank of India (RBI) is India’s central bank. It controls the monetary policy of the national currency, the Indian rupee. The RBI started operations under the British Raj on 1st April 1935 when it was set up by the Reserve Bank of India Act of 1934. Originally, it was held by private shareholders. After independence, the bank was nationalised as on 1st January 1949.
The RBI is an important tool in the development strategy of the Indian government. The basic functions of the RBI are the issuance of currency, to sustain monetary stability in India, to operate the currency and maintain the country’s credit system. It is governed by a 21-member Central Board of Directors comprising of the RBI Governor, Deputy Governors (4), representatives of the finance ministry (2), 10 members nominated by the government representing major elements from the country’s economy, directors to represent the local boards (4). It is a member of the Asian Clearing Union.