RESERVE BANK OF INDIA

The Reserve Bank of India (RBI) was set up in 1935 (by the RBI Act, 1934) as a private bank with two extra functions—regulation and control of the banks in India and being the banker of the government. After nationalisation in 1949, it emerged as the central banking body of India and it did not remain a ‘bank’ in the technical sense. Since then, the governments have been handing over different functions4 to the RBI, which stand today as given below:

(i) It is the issuing agency of the currency and coins other than rupee one currency and coin (which are issued by Ministry of Finance itself with the signature of the Finance Secretary on the note).

(ii) Distributing agent for currency and coins issued by the Government of India.

(iii) Banker of the government.

(iv) Bank of the banks/Bank of last resort.

(v) Announces the credit and monetary policy for the economy.

(vi) Stabilising and targeting (CPI–C) the rate of inflation.

(vii) Stabilising the exchange rate of rupee.

(viii) Keeper of the foreign currency reserves.

(ix) Agent of the Government of India in the IMF.

(x) Performing a variety of developmental and promotional functions under which it did set up institutions like IDBI, SIDBI, NABARD, NHB, etc.