Banking Awareness: All about Reserve Bank of India (RBI) for Coming IBPS Exams and Interviews

Reserve Bank of India (RBI)

The Reserve Bank of India (RBI) is the nation’s central bank. Since 1935, RBI began operations, and stood at the centre of India’s financial system, with a fundamental commitment to maintaining the nation’s monetary and financial stability.

From ensuring stability of interest and exchange rates to providing liquidity and an adequate supply of currency and credit for the real sector; from ensuring bank penetration and safety of depositors’ funds to promoting and developing financial institutions and markets, and maintaining the stability of the financial system through continued macro-financial surveillance, the Reserve Bank plays a crucial role in the economy. Decisions adopted by RBI touch the daily life of all Indians and help chart the country’s current and future economic and financial course.

The origin of the Reserve Bank can be traced to 1926, when the Royal Commission on Indian Currency and Finance—also known as the Hilton-Young Commission— recommended the creation of a central bank to separate the control of currency and credit from the government and to augment banking facilities throughout the country. The Reserve Bank of India Act of 1934 established the Reserve Bank as the banker to the central government and set in motion a series of actions culminating in the start of operations in 1935. Since then, the Reserve Bank’s role and functions have undergone numerous changes—as the nature of the Indian economy has changed.

Today’s RBI bears some resemblance to the original institution, but the mission has expanded along with the deepened, broadened and increasingly globalised economy. Over the years, RBI’s specific roles and functions have evolved. However, there have been certain constants, such as the integrity and professionalism with which the Reserve Bank discharges its mandate.

RBI at a Glance

Managed by Central Board of Directors
India’s monetary authority
Supervisor of financial system
Issuer of currency
Manager of foreign exchange reserves
Banker and debt manager to government
Supervisor of payment system
Banker to banks
Maintaining financial stability
Developmental functions
Research, data and knowledge sharing

Official Directors

1 Governor
4 Deputy Governors at a maximum

Non-official Directors

4 Directors – nominated by the Central Government to represent each local board
10 Directors nominated by the Central Government with expertise in various segments of the
economy
1 representative of the Central Government

Holding of Meetings of the Board