Also, get to understand about the important facts of Reserve Bank of India

The Reserve Bank of India is the central bank of our country, which is responsible for monetary matters, supervision of banking and banks, currency management and many other important functions.

History       

1. The Reserve Bank of India was established on 1^st April 1935 during the British colonial rule, under the Reserve Bank of India Act, 1934. It was based on minutes of the Hilton Young Commission.

2. The Central Office was first constructed in Calcutta, but later in 1937, it was shifted to Mumbai.

3. The first governor of the RBI was Sir Osborne A. Smith. His term started on April 1, 1935, and ended on June 30, 1937

4. It was originally a private entity. However, post-nationalization in 1949, the Government of India has full ownership of the Reserve Bank.

5. The current governor of the RBI is Shri Shaktikanta Das, who has been holding the position since December 12, 2018.

Organizational Structure of the RBI

• The Reserve Bank’s day to day affairs is managed by a central board of directors. The directors of the board are appointed by the Union Government, according to the Reserve Bank of India Act.
• The Appointment period for the directors is four years.
• The RBI follows a clear cut hierarchy. The head of the institution is the Governor, succeeded by four Deputy Governors for each region- East, West, North, and South.
• Below the Deputy Governors are the executive directors and the hierarchy goes a long way.
• Other Non-official directors are nominated by the government. These include ten Directors from different fields, two officials from the government and four directors, one from each of the four local boards.
• At present, it has offices at 31 locations in Hyderabad, Dehradun, Bhopal, and many other cities, throughout the country.

Functions of the RBI:

• Formulation and implementation of monetary policy.
• With growth as the primary objective, ensuring stability in the price of goods and services.
• Sets flexible parameters for banks’ daily operations.
• Formulates the framework for banking and financial system functions.
• Ensures the provisions of Foreign Exchange Management Act, 1999 are duly taken into consideration in Forex transactions.
• Controls currency circulation. Takes decision on issuing, exchanging or destroying notes or coins not fit for use.
• Regulates and Supervises payment and settlement systems to maintain the confidence of the public.
• Acts as the banker to the government do merchant banking for the central as well as state governments.
• Maintains records of banking accounts of all scheduled banks. 

Since its inception, The bank has played a pivotal part in development, especially the agriculture sector. It has used finance to push progress and development. It has also been instrumental in setting up the financial infrastructure of the country by setting up institutions like the Unit Trust of India Discount and Finance House of India National Bank of Agriculture and Rural Development.

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