The Reserve Bank of India | 83rd Establishment Day

Dear Aspirants,
The Reserve Bank of India | 83rd Establishment Day
Today is the 83rd Establishment Day of the apex monetary institution, the Reserve Bank of India. One of the primary regulators of the Indian Financial sector RBI was set up on the recommendations of the Royal Commission on Indian Currency and Finance (Hilton Young Commission). Celebrating its 83rd establishment day let’s go ahead and know more about the central bank of the country which is an integral topic of General Awareness section of all Banking Exams.
The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934.The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.
The Reserve Bank of India Act, 1934 sets out the objectives of the Reserve Bank:
“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; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth.”
Appointed by the GOI as according to the Reserve Bank of India Act, a central board of directors govern the affairs of RBI. The present Governor Mr. Urjit Patel and Deputy Governors (not more than four) viz NS Vishwanathan, Dr. Viral V Acharya and BP Kanugno constitute the official directors body. Apart from this, there are 10 non-official directors from various fields and two Government officials.
The primary functions of RBI can be summarized as:
1    1) Monetary Policy formulation, implementation and monitoring.
2    2) Prescribing parameters of Banking Operations.
3      3) Managing the Foreign Exchange Management Act,1999.
4       4) Issuing/Exchanging/Destroying Currency and Coins as required.
5       5) Merchant Banking function for the Central & State Government
To carry out these functions efficiently RBI has established offices at 31 locations across the country till date. Since its very inception, the Bank has been seen as playing a special role in the context of development, especially Agriculture. The developmental role of the Bank came into focus, especially in the sixties when the Reserve Bank, in many ways, pioneered the concept and practice of using finance to catalyze development. The Bank was also instrumental in institutional development and helped set up institutions like the Deposit Insurance and Credit Guarantee Corporation of India, the Unit Trust of India, the Industrial Development Bank of India, the National Bank of Agriculture and Rural Development, the Discount and Finance House of India etc. to build the financial infrastructure of the country.
With liberalization, the Bank’s focus has shifted back to core central banking functions like Monetary Policy, Bank Supervision and Regulation, and Overseeing the Payments System and onto developing the financial markets. The endeavor of the Reserve Bank has been to develop a robust, efficient and diversified financial system so as to anchor financial stability and to facilitate efficient transmission of monetary policy.  In addition, the Reserve Bank pursues operational objectives in the context of its core function of issuance of bank notes and currency management as well as its agency functions such as banker to Government (Centre and States) and management of public debt; banker to the banking system including regulation of bank reserves and the lender of the last resort.
The Reserve Bank of India communicates with various types of audiences. In order to reach out to the common person, the Reserve Bank releases information in 11 regional languages spoken by a large section of the population, apart from in English and in Hindi.
In all in its 83 years of round the clock efforts the Reserve Bank of India has done a commendable job in providing the nation with modern banking practices and building a solid credit structure. Cheap remittance facilities, stable structure of interest rates, stability in exchange value of rupee, successful management of Public Debt, development of a sound bill market and rational allocation of credit are a few achievements of the Banker’s Bank over the years which has not only contributed to economic development but also has enhanced public confidence in banking sector.

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