Reserve Bank of India | RBI | Central Bank of India

Reserve Bank of India or RBI as abbreviated in India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The main aim of RBI is to regulate the issue of Bank Notes and keep reserves with a view to ensure monetary stability in India. It also operates currency and credit system of the country  nations advantage. It also provides information about monetary policy and operations, issues of government securities, financial and economic statistics. However its main function remains general superintendence and direction of the Bank's affairs.

The Reserve Bank of India

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. Initially it was privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.

Preamble of the Reserve Bank of India

The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as:

"...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."

How Reserve Bank of India Functions?

The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. They are appointed/nominated for a period of four years and their Constitution is as following:

Official Directors

Full-time : Governor and not more than four Deputy Governors

Non-Official Directors

Nominated by Government: ten Directors from various fields and one government Official

Others: four Directors - one each from four local boards

Functions : General superintendence and direction of the Bank's affairs

RBI Credit Policy

RBI is adopting hawkish stand by tightening the credit policy and this quarterly update is having an impact on Indian stock market and thus this credit policy announcement needs to be watched carefully. Please click on below related posts and read the comments below to know latest RBI updates.

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