Reserve Bank Of India

The Reserve Bank of India

Reserve Bank of India, the Central Bank of the country, is at the center of the Indian Financial and Monetary system. RBI is among the oldest among the developing countries . It was inaugurated on April 1, 1935 as a private shareholders' institution under the Reserve Bank of India Act 1934. It was nationalised in January 1949, under the Reserve Bank (Transfer to Public Ownership) of India Act, 1948.

This act empowers the central government, in consultation with the Governor of the Bank, to issue such directions to RBI as might be considered necessary in the public interest . RBI is governed by a Central Board of Directors with 20 members consisting of the Governor and the Deputy Governors. The Governor and the deputy Governors of the Bank are Government of India appointees.


The preamble to the Reserve Bank of India Act lays down the purpose of establishing RBI as “to regulate issue of Bank notes, to keep the 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”.

RBI took a leading role in designing and implementing policies for agricultural and industrial development and for laying the foundations for financial markets. Some of today’s premier development and market institutions such as the National Bank for Agriculture and Rural Development (NABARD), the Industrial Development Bank of India (IDBI) and the Unit Trust of India (UTI) had their beginnings as specialized departments and divisions within the RBI.

When RBI started in 1935, there were just three departments, namely the Banking Department, the Issue Department and the Agricultural Credit Department. Today, RBI has 26 departments in the Central Office, have 26 regional and field offices across the country, four subsidiaries (BRB Note Mudran Press Ltd., DICGC, NABARD and NHB,) and a staff of over 20,000 employees.

Today, RBI is the monetary authority, and regulator and supervisor for banks and non-banking financial companies. RBI is the issuer of currency and the debt manager for the central and state governments. Besides, RBI manage the country’s foreign exchange reserves, manage the capital account of the Balance of payments, and design and operate payment systems. RBI also operate a grievance redressal scheme for bank customers through the Banking Ombudsmen and formulate policies for treating customers fairly.