Role and Functions of Reserve Bank of India

Here we discuss about the role and functions of reserve bank of india also known as RBI. Important points are:

• RBI was established on the recommendation of the HILTON YOUNG COMMISSION through RBI Act 1934 in 1935.
• Established as a private bank with a corpus of Rs. crore. RBI was nationalized in the year 1949.
• RBI headquarters at Mumbai.
• RBI had one governor [who is the representative of RBI] and is supported by 4 deputy governors.

FEW FACTS

• First governor of RBI: OSBORNE SMITH [Britisher] 1935
• First Indian governor of RBI : C.D. Deshmukh [1949]
• Present Governor: Raghuram Govinda Rajan
  • 23rd governor of RBI

Alternate/Others Names of Reserve Bank of India RBI

1. Apex banking and Monetary Authority of India.
2. Bankers Bank
3. Bankers to the Government of India
4. Debt Manager to the Govt. of India.
5. Indian economy’s Central Bank
6. Lender of the Last Resort.

Role and Functions of Reserve Bank of India RBI:

• To plan, formulate, issue, review and alter the Credit and Monetary policy of India.
• RBI is the sole issuer of currency of India.
• RBI acts as a banker of
  • Banks
  • Central Govt.
  • State Govt.
  • Meaning it accepts, deposits, transfer the money and payout the money to them.
• RBI is the regulator of the banking system of India through banking regulation act 1949.
• RBI is the regulator of the payment system of India (NEFT,RTGS,ATM,ECS etc)
• RBI is the custodian of foreign exchange reserves of India.
• RBI is the debt manager to the govt. of India and it is the manager of the domestic foreign exchange market of India.
• RBI is the responisble authority to establish economic institution for the economic growth of India.
• RBI is responsible for R and D in the banking sector, financial literacy and financial inclusion in the Indian economic system.