write an essay on reserve bank of india

• भाषा : हिंदी
• Classroom Courses
• Our Selections
• Student Login
• About NEXT IAS
• Director’s Desk
• Advisory Panel
• Faculty Panel
• General Studies Courses
• Optional Courses
• Interview Guidance Program
• Postal Courses
• Test Series
• Current Affairs
• Student Portal

• Prelims Analytica
• CSE (P) 2024 Solutions
• Pre Cum Main Foundation Courses
• 1 Year GSPM Foundation Course
• 2 Year Integrated GSPM Foundation Course: Elevate
• 3 Year Integrated GSPM Foundation Course: EDGE
• 2 Year GSPM Foundation with Advanced Integrated Mentorship (FAIM)
• Mentorship Courses
• 1 Year Advanced Integrated Mentorship (AIM)
• Early Start GS Courses
• 1 Year GS First Step
• Mains Specific
• Mains Advance Course (MAC) 2024
• Essay Guidance Program cum Test Series 2024
• Ethics Enhancer Course 2024
• Prelims Specific
• Weekly Current Affairs Course 2025
• Current Affairs for Prelims (CAP) 2025
• CSAT Course 2025
• CSAT EDGE 2025
• Optional Foundation Courses
• Mathematics
• Anthropology
• Political Science and International Relations (PSIR)
• Optional Advance Courses
• Political Science & International Relations (PSIR)
• Civil Engineering
• Electrical Engineering
• Mechanical Engineering
• Interview Guidance Programme / Personality Test Training Program
• GS + CSAT Postal Courses
• Current Affairs Magazine – Annual Subscription
• GS+CSAT Postal Study Course
• First Step Postal Course
• Postal Study Course for Optional Subjects
• Prelims Test Series for CSE 2025 (Offline/Online)
• General Studies
• GS Mains Test Series for CSE 2024
• Mains Test Series (Optional)
• PSIR (Political Science & International Relations)
• Paarth PSIR
• PSIR Answer Writing Program
• PSIR PRO Plus Test Series
• Mathematics Yearlong Test Series (MYTS) 2024
• Indian Economic Services
• ANUBHAV (All India Open Mock Test)
• ANUBHAV Prelims (GS + CSAT)
• ANUBHAV Mains
• Headlines of the Day
• Daily Current Affairs
• Editorial Analysis
• Monthly MCQ Compilation
• Monthly Current Affairs Magazine
• Previous Year Papers
• Down to Earth
• Kurukshetra
• Union Budget
• Economic Survey
• Download NCERTs
• NIOS Study Material
• Beyond Classroom
• Toppers’ Copies
• Indian Economy

Reserve Bank of India (RBI): Origin, Structure, Functions & More

The Reserve Bank of India (RBI) , as the central banking institution of India, is the backbone of the Indian financial system. As the custodian of the country’s economic and financial stability, it plays a crucial role in India’s economic development and smooth functioning of the entire banking sector. This article of NEXT IAS aims to study in detail the Reserve Bank of India (RBI), its origin, evolution, structure, functions, and more.

About Reserve Bank of India (RBI)

• The Reserve Bank of India , abbreviated as the RBI , is the Central Bank of India, meaning it is the apex body in the Indian financial system.
• It is owned by the Union Ministry of Finance.
• It acts as a regulatory body, responsible for the regulation of the Indian banking system as well as the control, issuing, and maintaining money supply in the Indian economy.

Objectives of Reserve Bank of India (RBI)

Some of its major objectives can be seen as follows:

• To regulate the issue of banknotes
• To maintain reserves with a view to securing monetary stability and
• To operate the credit and currency system of the country to its advantage.
• To maintain price stability while keeping in mind the objective of growth.

History of Reserve Bank of India (RBI)

The Reserve Bank of India was established to tackle the economic turmoil that occurred after World War-I. The timeline of origin and evolution of the Reserve Bank of India (RBI) can be seen as follows:

Note: India was the first British colony to have its own Central Bank.

Nationalization of Reserve Bank of India (RBI)

The Reserve Bank of India (RBI), as established in 1935, was, initially, a privately owned entity. It meant that its share capital was divided into shares, owned by private individuals and institutions.

However, later, the Government of India passed the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. As per its provisions, the ownership of the Reserve Bank of India was transferred from private entities to the government. This is called the nationalization of the RBI, which transformed it from a privately owned entity to a fully government-owned entity.

After nationalization in 1949, it emerged as the Central Bank of India and no more remained a ‘bank’ in the technical sense.

Branches and Offices of RBI

Various branches and offices of RBI can be seen hierarchically as follows:

Central Office of RBI

The Central Office of the Reserve Bank of India is the main office and headquarters of the RBI. This is the office where the RBI Governor sits and the whole organization of the RBI is controlled from.

Zonal Offices of RBI

The RBI has 4 Zonal Offices, located in

• Kolkata – represents the East Region
• Mumbai – represents the West Region
• Delhi – represents the North Region
• Chennai – represents the South Region

Regional Offices of RBI

The Reserve Bank of India (RBI) has about 22 regional offices , which play a crucial role in the functioning of the RBI at the regional level. These offices are mostly located in the capital cities of the states.

Other Offices of RBI

The RBI has other offices in prominent cities across India, which perform specific tasks like:

• Specialized departments like rural planning or agricultural credit.
• Training centers for bankers.
• Oversight of specific financial institutions.

Structure of Reserve Bank of India (RBI)

The structure of the Reserve Bank of India (RBI) can be seen as follows:

Central Board of Directors of RBI

The Central Board of Directors is the main committee of the Reserve Bank of India, responsible for its overall control and direction. It is a 21-member body, comprising the following members:

• The Governor of the Reserve Bank of India.
• Not more than 4 Deputy Governors (for a tenure of not more than 5 years)
• 10 Directors from various fields, nominated by the Government of India (for a tenure of 4 years)
• 4 Directors representing the 4 Local Boards of the Reserve Bank of India (1 Director nominated by each of the 4 Local Boards – Mumbai, Kolkata, Chennai, and Delhi)
• 2 Government officials nominated by the Government of India

Local Boards of RBI

• The 4 Zonal Offices of the Reserve Bank of India are controlled by a Local Board for each.
• Each of these local boards consists of 5 members who represent regional interests and the interests of cooperative and indigenous banks.

Key Facts about RBI

Functions of reserve bank of india (rbi).

Major functions of the RBI can be seen under the following 2 heads:

Monetary Functions of RBI

Monetary Functions of the Reserve Bank of India include those functions which are concerned with money and money supply in the economy. Major functions coming in this category include:

• The 1 Rupee note and the coins of all denominations are minted and issue by the Government of India, not the RBI. But, they are circulated by the RBI.
• The RBI issues currency notes under a system called Minimum Reserve System.
• Manages Government accounts and treasuries.
• Keeps deposits of the Government.
• Lends to the Governments without any interest for the short term
• Buys and sells Government Securities (G-Secs) on the Government’s behalf.
• Gives monetary and financial advice to the Governments.
• Keeps the reserves of banks in the form of Cash Reserve Ratio (CRR) with itself.
• Provides financial assistance to banks against mortgaged securities
• Rediscounts Bills of Exchange.
• Lender of Last Resort : It also acts as a lender of last resort for the Scheduled Commercial Banks (SCBs). Usually, banks and other financial institutions borrow and lend among themselves to meet their financial needs. But, in times of crisis, the SCBs approach the RBI to get financial assistance.
• This function of the RBI also helps promote international trade.
• This helps in controlling inflation and deflation and hence stabilizing the general price level in the economy.

General Functions of RBI

The General Functions of the RBI include functions related to general regulation and promotion of the banking system so as to maintain the health and growth of the banking system in the country. Major functions included in this category are as follows:

• Licensing banks,
• Prescribing minimum requirements of paid-up capital and reserves, etc.
• Enabling expansion of the Commercial Banks in terms of their branches in the country or aboard,
• Promoting baking habits of people,
• Promoting financial inclusion,
• Consumer education and protection,
• Promoting Digital India initiatives in financial sector, etc.

Currency Notes Printing and Coins Minting in India

Minimum reserve system.

In 1957, the RBI adopted the Minimum Reserve System for issuing currency notes. As per this system, to issue money, the RBI maintains Gold and Foreign Currency Reserves of worth ₹ 200 crores as a backup.

Note : Out of this reserve, a minimum of ₹115 crores should be in Gold.

Publications of RBI

RBI, from time to time, conducts various surveys and publishes various reports to gauge the pulse of the economy. Some of the major publications of the RBI include:

• Financial Stability Report (Half-Yearly) : It reflects the collective assessment of the risks to financial stability and the resilience of the financial system. The Report also discusses issues relating to the development and regulation of the financial sector.
• It plays a crucial role in determining the policy rate required to achieve the inflation target.
• Consumer Confidence Survey (Quarterly): It compiles qualitative responses from households, regarding their sentiments on general economic conditions, overall price situation, employment, income, spending scenario, etc.
• The results of this survey is used as one of the important inputs for the formulation of the monetary policy.
• Report on Foreign Exchange Reserves (Half-Yearly): It contains the developments regarding movement of foreign exchange reserves, information on the external liabilities vis-à-vis the reserves, adequacy of reserves, objectives of reserve management, statutory provisions, risk management practices, information on transparency and disclosure practices, etc.
• Payment Enablers
• Payment Infrastructure – Demand-side Factors
• Payment Infrastructure – Supply-side Factors
• Payment Performance
• Consumer Centricity

Incomes and Expenditures of RBI

Major components of the incomes and expenditures of the RBI can be seen under the following 2 heads:

RBI’s Incomes

Most part of the RBI’s income mainly comes from its operations in financial markets. They include:

• Incomes form buying or selling foreign exchange.
• Incomes from Open Market operations (to prevent the rupee from appreciating).
• Incomes from government securities it holds.
• Returns from its foreign currency assets that are invested in the bonds of foreign central banks or top-rated securities.
• Returns from deposits with other central banks or the Bank for International Settlement (BIS).
• Returns from From lending to banks for very short tenures
• Management commission on handling the borrowings of State Governments and the Central Government.

RBI’s Expenditures

Major components forming part of expenditures of the Reserve Bank of India include:

• Expenditures on printing of currency notes
• Salary of its staff
• Giving commissions to banks for undertaking transactions on behalf of the government
• Giving commissions to primary dealers for underwriting some of these borrowings.

Issue of RBI Surplus Transfer

What is rbi surplus.

The RBI’s total expenditure is only about 1/7th of its total net income. The difference between RBI’s income and expenditure is known as RBI Surplus.

Out of its total surplus, RBI holds some amount to itself as equity capital to maintain its creditworthiness and pays the rest to the government.

Government’s Stance on Surplus Transfer

The government is of the opinion that the Reserve Bank of India should pay more dividends. The reasoning given by the government is that the building up of buffers such as the Contingency Fund and Asset Reserve by the Central Bank has been far in excess of what is required to maintain creditworthiness.

RBI’s Stance on Surplus Transfer

The Reserve Bank of India, on the other hand, says that increasing the dividend payment to the government can prove to be inflationary as there will be more money in the market and may harm its major task of macroeconomic stability.

It also reasons that the surplus is used to cover a situation where the rupee appreciates against one or more of the currencies or if there is a decline in the rupee value of gold.

Advantages of Surplus Transfer

• The government can utilize funds for public spending, which could lead to a revival in demand and boost economic activity and thus help deal with economic slowdown.
• It can help the government cut back on planned borrowings, thereby providing space for private companies to raise money from markets. This, in turn, would do away the risk of crowding out of private investments.
• It can be utilized to provide capital to government-owned banks in form of recapitalization. This will help strengthen the health of the banking system.

Disadvantages of Surplus Transfer

• It reduces RBI’s Buffer against externalities such as potential threats from financial shocks, and the need to ensure financial stability and provide confidence to the markets.
• Maintaining a sufficient buffer of the surplus is crucial for the autonomy of the Reserve Bank of India so that it doesn’t depend on the Government in times of financial stress.
• Surplus transfers can cause inflationary situations if government spending is not done in a proper manner.

Autonomy of Reserve Bank of India (RBI)

As the Central Bank of India, the role of the Reserve Bank of India is crucial in promoting financial stability and economic growth. Thus, it must have a significant degree of autonomy in its functioning. However, some factors seem to hamper the autonomy of the RBI. These factors the suggested way ahead are explained in the sections that follow.

Factors Hampering Autonomy of RBI

• Section 30 of the RBI Act allows the government to supersede the RBI’s Central Board.
• Section 58 circumscribes the powers of the Central Board to make regulations only with the previous sanction of the Central Government.
• Section 7(1) says that the Union government can give directions to the central bank, after consultation with the RBI Governor in the public interest.
• According to a report, since independence, 7 out of every 10 RBI Governors have been former Finance Ministry officials . This raises the question of the independent functioning of the Reserve Bank of India.
• The Central Board of Directors, the highest decision-making body of the RBI, consists of 21 members, of which 12 members are nominated by the Union government. This gives the government a large say in the functioning of the Reserve Bank of India.
• The government frequently asks the Reserve Bank of India to ease lending rules under its Prompt Corrective Action (PCA) Framework, as it could help reduce pressure on MSMEs and Power Companies through credit availability. This jeopardizes the RBI’s efforts to deal with the country’s Non-Performing Asset (NPA) Crisis.
• The issue of increasing RBI Surplus Transfer has been also hampering the autonomy of RBI.

The tussle between the Reserve Bank of India and the government can impact the image of India as a stable market as investors require long-term policy consistency. Thus it is necessary that the government should respect the mandate given to the Reserve Bank of India as a regulator of the banks. At the same time, the RBI must also understand that constitutionally it is a part of the government and not a completely independent body. Thus, both sides should maintain a fine balance so as to ensure the objectives of stable economic growth and welfare of the people.

The Reserve Bank of India (RBI) plays an indispensable role in India’s economic well-being. Its commitment to monetary stability, financial regulation, and inclusive growth ensures a strong foundation for the nation’s financial system. As India navigates an evolving economic landscape, the RBI’s continued vigilance and adaptability will be crucial in steering the country towards a prosperous future.

FAQs on RBI

Who is the governor of the reserve bank of india.

Shri Shaktikanta Das is serving as the current & 25th Governor of the RBI.

Is RBI a Statutory Body?

Yes, it is a statutory body. It was established under the Reserve Bank of India Act, 1934, which defines the RBI’s powers and functions.

Where is the Reserve Bank of India Situated?

The central office of the RBI, which functions as its headquarters, is located in Mumbai.

RELATED ARTICLES MORE FROM AUTHOR

World food day – strike to hunger, food security in india: challenges and opportunities, minimum support price (msp): calculation, benefits & issues & way forward, sovereign credit rating: key points, determinants & criticism, cryptocurrency: working, advantages & disadvantages, gig economy: advantages, challenges & driving factors, leave a reply cancel reply.

Save my name, email, and website in this browser for the next time I comment.

Featured Post

NEXT IAS (Delhi)

Old rajinder nagar.

• 27-B, Pusa Road, Metro Pillar no.118, Near Karol Bagh Metro, New Delhi-110060

Mukherjee Nagar

• 1422, Main Mukherjee Nagar Road. Near Batra Cinema New Delhi-110009

NEXT IAS (Jaipur)

• NEXT IAS - Plot No - 6 & 7, 3rd Floor, Sree Gopal Nagar, Gopalpura Bypass, Above Zudio Showroom Jaipur (Rajasthan) - 302015

NEXT IAS (Prayagraj)

• 31/31, Sardar Patel Marg, Civil Lines, Prayagraj, Uttar Pradesh - 211001

Foreign Investment: Meaning, Types & More

• IAS Preparation
• UPSC Preparation Strategy

Reserve Bank of India [UPSC Notes for Indian Economy]

The Reserve Bank of India (RBI) is India’s central bank. It controls the monetary policy concerning the national currency, the Indian rupee. The basic functions of RBI are the issuance of currency, sustaining monetary stability in India, operating the currency, and maintaining the country’s credit system. In this article, you can read all about the Reserve Bank of India, its origins, the role of RBI, its functions, mandate and all the latest updates related to the RBI, relevant for the IAS exam Indian economy segment.

Reserve Bank of India Download PDF Here

In May 2023, the Reserve Bank approved a Rs 87,416 crore dividend payout to the central government for 2022-23, nearly triple what it paid in the previous year.

• The decision was taken at the 602nd meeting of the Central Board of Directors of the Reserve Bank of India held under the chairmanship of Governor Shaktikanta Das.
• The board approved the transfer of Rs 87,416 crore as surplus to the central government for the accounting year 2022-23.
• This is a 188% jump from the last year’s (2021-22) surplus transfer of Rs 30,307 crore.
• It decided to keep the Contingency Risk Buffer (CRB) at 6 per cent.
• The contingency risk buffer is a specific provision fund kept by the central bank primarily to be used during any unexpected and unforeseen contingencies.
• The Bimal Jalan Committee recommended that the CRB needs to be maintained at a range of 5.5% to 6.5% of the RBI’s balance sheet.
• The board also reviewed the global and domestic economic situation and associated challenges, including the impact of current global geopolitical developments.
• The dividend could bring in additional revenue of around 0.2 per cent of GDP.

Provisions Regarding Transfer of Surplus by RBI:

• The Reserve Bank of India Act of 1934 mandates that profits made by the central bank from its operations be sent to the Central Government.
• As the manager of its finances, every year the RBI also pays a dividend to the government to help with the finances from its surplus or profit.
• A technical Committee of the Reserve Bank of India headed by Y H Malegam (2013), which reviewed the adequacy of reserves and surplus distribution policy, recommended a higher transfer to the government.

How Does RBI Make Profits?

• The RBI is a “full-service” central bank.
• It is mandated to keep inflation in check and also manage the borrowings of the Government of India and of state governments.
• It also supervises or regulates banks and non-banking finance companies and manages the currency and payment systems.  While carrying out these functions, RBI makes profits.
• RBI claims a management commission on handling the borrowings of state governments and the central government.
• RBI also earns interest on its holdings of local rupee-denominated government bonds or securities, and while lending to banks for very short tenures, such as overnight.
• RBI’s income comes from the returns it earns on its foreign currency assets, which could be in the form of bonds and treasury bills of other central banks or top-rated securities, and deposits with other central banks.

Reserve Bank of India has dismissed worries about the “exposure” of Indian banks to the Gautam Adani-led conglomerate. Click here to read more about the Adani-Hindenburg issue .

What is Final Exposure?

• A bank’s counterparty exposures may cause its assets to become concentrated in the hands of a single or network of connected counterparties.

About Large Exposure Framework (LEF) Guidelines:

• The Basel Committee on Banking Supervision (BCBS) released supervisory recommendations on significant exposures in January 1991, titled Monitoring and Managing Significant Credit Exposures. Know more about Basel III Norms in the link.
• The recommendations on large exposures (LE) for banks were created by the RBI after deciding that Indian banks should properly embrace these standards.
• With rare exclusions, the LEF applies to a bank’s exposure to all of its counterparties as well as groups of connected counterparties.
• It is founded on the 2014 Basel guidelines.
• Positive indications include numerous measures of sufficient capital, excellent assets, liquidity, provision coverage, and profitability.

Update on Feb 2021

• On 16th February 2021, RBI announced an expert committee on primary urban cooperative banks. The chairman of the committee is NS Vishwanathan. (Get the list of committees with their purpose in the linked article for quick revision for UPSC.)
• On 5th February 2021, RBI Monetary Policy (2021-22) was announced. The central bank kept the Repo Rate at 4 percent while projected the GDP growth in Fiscal Year (FY) 2022 at 10.5 percent. (Understand Cash Reserve Ration, Repo Rate and Reserve Repo Rate in the linked article.)

What is RBI?

RBI is an institution of national importance and the pillar of the surging Indian economy. It is a member of the International Monetary Fund (IMF) . 

• The concept of the Reserve Bank of India was based on the strategies formulated by Dr. Ambedkar in his book named “The Problem of the Rupee – Its Origin and Its Solution”.
• This central banking institution was established based on the suggestions of the “Royal Commission on Indian Currency & Finance” in 1926. This commission was also known as the Hilton Young Commission.
• In 1949, the Reserve Bank of India was nationalized and became a member bank of the Asian Clearing Union.
• RBI regulates the credit and currency system in India.
• The chief objectives of the RBI are to sustain the confidence of the public in the system, protect the interests of the depositors, and offer cost-effective banking services like cooperative banking and commercial banking to the people.

Reserve Bank of India (RBI) – Timeline

The RBI is an important tool in the development strategy of the Indian government. UPSC has asked several questions regarding RBI functions, objectives, monetary regulations, etc., especially in UPSC Prelims . One of the things to know about RBI is its timeline which is provided in the table below:

In the year 2016, the original RBI Act of 1934 was amended and that provided the statutory basis for the implementation of the flexible inflation-targeting framework. 

The Preamble of Reserve Bank of India

Another thing to know about RBI is its Preamble. It describes the basic functions of the Reserve Bank as:

“… to regulate the issue of Bank Notes and keeping of reserves to secure monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”

Functions of Reserve Bank of India

In this section, we discuss the functions of RBI in detail.

The Reserve Bank of India works as:

Monetary Authority

• Implementation of monetary policies.
• Monitoring the monetary policies
• Ensuring price stability in the country considering the economic growth of the country

Also, read about the Monetary Policy Committee (MPC) and know more about this six-member committee.

Regulator and Administrator of the Financial System

• The RBI determines the comprehensive parameters of banking operations.
• License issuing
• Liquidity of assets
• Bank mergers
• Branch expansion, etc.

Managing Foreign Exchange

• RBI manages the FOREX Reserves of India.
• It is responsible for maintaining the value of the Rupee outside the country. 
• It aids foreign trade payments. 

Issuer of currency

• The Reserve Bank of India is responsible for providing the public with a sufficient supply of currency notes and coins. 
• The quality of currency notes and coins is also taken care of by the RBI.
• RBI is in charge of issuing and exchanging of currency and coins. 
• Also, the destruction of currency and coins that are not fit for circulation.

RBI’s Developmental Role

• Promotional functions that support national objectives are organized by RBI that encourage rural and agricultural economic development.
• The RBI will regularly issue directives to commercial banks to lend loans to small-scale industrial units. 

Composition of RBI

• The Reserve Bank of India is controlled by a central board of directors. The directors are appointed for a 4-year term by the Government of India in keeping with the Reserve Bank of India Act.
• 4 Deputy Governors
• 2 Finance Ministry representatives
• 4 directors to represent local boards headquartered in Mumbai, Kolkata, Chennai, and New Delhi
• The executive head of RBI is the Governor.
• The Governor is accompanied by 4 deputy governors.
• The First Governor of RBI was Sir Osborne Smith and the First Indian Governor of RBI was C D Deshmukh.
• The First woman Deputy Governor of RBI was K J Udeshi.
• The only Prime Minister who had been the Governor of RBI was Manmohan Singh.

The current governor of RBI is Shaktikanta Das. Get the list of RBI Governors in the linked article.

Zonal Offices

• RBI has four zonal offices: New Delhi for North, Chennai for South, Kolkata for East, and Mumbai for West.
• The Reserve Bank of India has 19 regional offices and 11 sub-offices at present.
• Reserve Bank Staff College at Chennai
• College of Agricultural Banking at Pune.

Indian Economy Articles:

Leave a Comment Cancel reply

Your Mobile number and Email id will not be published. Required fields are marked *

Request OTP on Voice Call

Post My Comment

IAS 2024 - Your dream can come true!

Download the ultimate guide to upsc cse preparation, register with byju's & download free pdfs, register with byju's & watch live videos.

• Search Search Please fill out this field.
• History of the RBI
• The RBI and Indian Economy
• India’s Growth 

The Bottom Line

• Government & Policy

The Increasing Importance of the Reserve Bank of India

India is one of the fastest-growing economies in the world, reporting some of the best gross domestic product (GDP) growth rates in the world. It is also one of the five most powerful emerging market countries. This group, which includes Brazil, Russia, China, and South Africa, are collectively known as the BRICS nations . The country's monetary and fiscal policies are the responsibility of the country's central bank, the Reserve Bank of India (RBI) . Headquartered in India's finance capital, Mumbai, the bank had over $818.33 billion in assets.

Key Takeaways

• The Reserve Bank is India's central bank.
• It began operations in 1935—a year after the establishment of the Reserve Bank of India Act of 1934.
• The RBI is responsible for regulating currency, securing monetary stability, maintaining currency reserves, and overseeing India's credit and currency system.
• RBI Governor Shaktikanta Das was appointed in December 2018.
• India's economy is the fifth-largest in the world, after the United States, China, Japan, and Germany.

History of the Reserve Bank of India (RBI)

The Reserve Bank of India began operations as the country's central bank in April 1935 following the establishment of The Reserve Bank of India Act of 1934. The Act provides the framework for the central bank, which was set up at the behest of the Hilton Young Commission, also called the Royal Commission on Indian Currency and Finance.

It originally served as a shareholder's bank until 1949 when it was nationalized. The RBI had a key role in the development of the nation's economy beyond just monetary and fiscal policy . Its development policies extended to other sectors, such as agriculture. It also helped set up a number of key national institutions, such as the Deposit Insurance and Credit Guarantee Corporation of India, the Industrial Development Bank of India, and the National Bank of Agriculture and Rural Development.

Over time, the bank's focus shifted, narrowing it down to the traditional functions of a central bank. It now has three main objectives, which include:

• Regulating and issuing currency
• Securing India's monetary stability by maintaining currency reserves
• Overseeing and operating the nation's credit and currency system

The RBI is headed by Governor Shaktikanta Das, who was appointed to head up the bank in December 2018. His support of demonetization is in line with the views of top government officials. He is also expected to better align with India’s government leadership and amicably support better access to credit.

The Reserve Bank of India played a central role in the economies of a number of countries in the region, including Myanmar until 1947 and Pakistan until 1948—about a year after Partition.

The Reserve Bank of India (RBI) and the Indian Economy

As with all economies, the central bank plays a key role in managing and monitoring the monetary policies affecting both commercial and personal finance as well as the banking system.

Demonetizing the Rupee

The bank affected a demonetization of the Indian rupee (INR) in 2016, removing Rs. 500 and Rs. 1000 notes from circulation, eliminating nearly 86% of its money overnight. The move aimed to stop counterfeiting , hoarding, terrorism-related activities, and tax evasion in a country where only 1% of citizens reportedly paid income taxes in 2013.

The analysis following this decision shows some wins and losses. The demonetization of the specified currencies caused cash shortages and chaos while also requiring extra spending from the RBI to print more money. On the other hand, tax collection increased, which resulted from greater consumer reporting transparency .

India is part of the BRICS group, which also includes Brazil, Russia, China, and South Africa. The economies of these countries are expected to dominate the global economy in the future. This informal group offered full membership to Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the United Arab Emirates, which goes into effect on Jan. 1, 2024.

Controlling Inflation

The central bank must also grapple with a slightly volatile inflation rate. The RBI Act of 1934 requires the bank and the federal government to consult with one another to come up with a suitable inflation target .

As of April 2021, the RBI reported a target rate of 4%—the highest level reaching 6% while the lowest hung in around 2%. This target will remain for the five-year period from April 1, 2021, to March 31, 2026.

India's policy repo rate remained steady at 4%. This is the interest rate that the central bank lends money to the nation's commercial banks . The RBI took drastic steps to address the economic and financial issues that resulted from the COVID-19 pandemic .

The rate dropped 2% from April 2019, when the bank set it at 6%. Credit rates remained relatively high in India prior to that time, despite the central bank’s positioning, which has been limiting borrowing across the economy.

The RBI banned the use of virtual currencies by the financial agencies and banks that it regulates in 2018.

India’s Economic Growth

India's economy experienced a significant degree of growth since the early 2000s. According to the World Bank , the country implemented policies to help get more than 90 million people out of poverty between 2011 and 2015.

Despite its rapid growth rate, the Indian economy has weakened—both before and during the global COVID-19 pandemic hit. A weak financial sector and a drop in private consumption led to a drop in growth from 8.3% to 4% between 2016 and 2019. The country's economy experienced negative growth in 2020, hitting.

The World Bank estimated India's GDP to be more than $3.39 trillion as of 2022, making it the fifth-largest in the world after the U.S., China, Japan, and Germany. Real GDP will hover around 6.3% during the 2023-2024 fiscal year, which is a moderate drop from the 6.9% reported during 2022-2023.

According to the World Bank, growth will stabilize around 7%. This will likely be due to a greater concentration on fiscal and monetary policy to help boost struggling individuals and businesses , as well as greater spending on health and welfare—all of which are expected to lessen the blow of the crisis.

What Are the Powers of the Reserve Bank of India?

The Reserve Bank of India is the central bank of India. Its primary task is to administer and monitor the country's monetary and fiscal policy, The bank is also responsible for overseeing and managing the value of the Indian rupee, regulating financial markets, and supporting the economy by controlling inflation.

How Does India's Economy Rank in the World?

India has the fifth-largest economy in the world, according to the World Bank. It comes after the economies of the United States, China, Japan, and Germany. India's GDP grew to 7%, amounting to $3.39 trillion in 2022.

Why Did India Demonetize the Rs. 500 and Rs. 1000 Notes?

India demonetized the Rs. 500 and Rs. 1000 banknotes in 2016. The country's central bank announced that the move was meant to fight counterfeiting and curb terrorist-related activities. The Reserve Bank of India also said demonetization was meant to stop people from hoarding cash.

As one of the fastest-growing emerging market countries in the world, India has several unique challenges ahead that will require nimble navigation from the RBI, not to mention tackling the coronavirus pandemic that has shaken the world. Shaktikanta Das will be charged with guiding the monetary policy direction for the country as it continues to take the spotlight for GDP growth.

Sovereign Wealth Fund Institute. " Reserve Bank of India (RBI) ."

Reserve Bank of India. " Brief History ."

Reserve Bank of India. " Brief History: Hilton Young Commission ."

Reserve Bank of India. " Shri Shaktikanta Das Appointed as Governor of RBI ."

Reserve Bank of India. " Withdrawal of Legal Tender Status for ₹ 500 and ₹ 1000 Notes: RBI Notice ."

BBC News. " Why India Wiped Out 86% of Its Cash Overnight ."

The Economic Times. " Demonetisation to Kill Black Money: RBI Directors Didn't Agree ."

BRICS 2023 South Africa. " Summit Declarations ," Download "XV BRICS Summit Johannesburg II Declaration, 24 August 2023," Page 26.

Reserve Bank of India. " Reserve Bank of India Act, 1934 ," Page 85.

Reserve Bank of India. " Monetary Policy Report - April 2021 ."

Reserve Bank of India. " Monetary Policy Report – April 2019 ."

Reserve Bank of India. " Prohibition on Dealing in Virtual Currencies (VCs) ."

The World Bank. " Poverty & Equity Brief: India, South Asia, April 2020 ," Page 1.

The World Bank. " The World Bank in India: Overview ."

The World Bank. " GDP Growth (Annual %) - India ."

The World Bank. " GDP (Current US$) - India ."

The World Bank. " Indian Economy Continues to Show Resilience Amid Global Uncertainties ."

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Essay on RBI

Students are often asked to write an essay on RBI in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on RBI

Introduction to rbi.

The Reserve Bank of India (RBI) is India’s central banking institution. Founded on April 1, 1935, it controls the monetary policy of the Indian Rupee.

Role of RBI

RBI’s main role is to maintain financial stability in India. It does this by controlling inflation and managing the country’s foreign exchange reserves.

Functions of RBI

RBI issues currency notes, controls money supply in the economy, and acts as the government’s banker. It also regulates and supervises financial institutions in India.

Importance of RBI

RBI plays a crucial role in India’s economic development. By controlling inflation and maintaining financial stability, it ensures a healthy economy.

250 Words Essay on RBI

The reserve bank of india: an overview.

The Reserve Bank of India (RBI) is the central banking institution of India, established on April 1, 1935, under the Reserve Bank of India Act. The RBI is the primary authority for India’s monetary policy and holds the pivotal role in the maintenance of the country’s economic stability and growth.

Roles and Responsibilities

The RBI’s primary role is to conduct monetary policy to maintain price stability while keeping in mind the objective of growth. It controls the issue and supply of the Indian Rupee and manages all the government accounts. The RBI is also responsible for regulating and supervising the financial system and certain types of financial institutions to ensure public confidence, protect depositors’ interests, and promote orderly and sustainable economic growth.

Impact on the Economy

The RBI plays a vital role in shaping India’s economic landscape. Through its monetary policy, it controls inflation and stabilizes the economy. It also plays a significant role in implementing the government’s economic vision by regulating the banking and non-banking financial sectors.

The RBI faces various challenges, including managing inflation, ensuring financial stability, and supporting economic growth. It also grapples with the task of striking a balance between the need for financial inclusion and the risks posed by it.

In conclusion, the RBI, as India’s central bank, plays a critical role in the nation’s economic framework. Its policies and actions significantly impact the Indian economy’s overall health and stability. Despite the challenges, it continues to strive for a balanced and sustainable economic environment.

500 Words Essay on RBI

Introduction.

The Reserve Bank of India (RBI) is the central banking institution of India, responsible for formulating the country’s monetary policy and managing its financial stability. Established on April 1, 1935, under the Reserve Bank of India Act, it has played a pivotal role in the development of the nation.

Role and Functions of RBI

The RBI’s primary function is to maintain monetary stability and ensure adequate flow of credit to productive sectors. It regulates the issue of banknotes, keeps reserves to secure monetary stability, and operates the credit and currency system of the country to its advantage. The RBI is also the regulator and supervisor of the financial system, setting broad parameters of banking operations within which the country’s banking and financial system functions.

Monetary Policy

The RBI’s monetary policy aims to maintain price stability, control inflation, and ensure adequate flow of credit to productive sectors. The Monetary Policy Committee (MPC), headed by the RBI Governor, is responsible for formulating monetary policy. The MPC uses various tools like repo rate, reverse repo rate, and cash reserve ratio to control money supply in the economy.

Foreign Exchange Management

The RBI manages the Foreign Exchange Management Act, 1999, to facilitate external trade and payment, promote orderly development and maintenance of foreign exchange market in India. It also holds and manages the foreign exchange reserves of the country, providing a comfort level to the government for meeting its foreign exchange requirements.

Regulatory and Supervisory Role

The RBI plays a crucial role in regulating and supervising commercial banks and non-banking finance companies in India. It lays down the regulatory framework for these institutions and ensures its enforcement. The RBI’s supervisory mechanism includes on-site inspections, off-site surveillance, and use of market intelligence.

Developmental Role

The RBI also has a developmental role, involving the development of the banking industry, providing institutional infrastructure, extending banking facilities to rural areas, and promoting financial inclusion. It also oversees the operation of the payment and settlement systems and ensures the availability of safe and efficient payment and settlement mechanisms.

In conclusion, the RBI’s role as the custodian of India’s monetary policy and the guardian of its financial system is integral to the country’s economic stability and growth. Its functions and responsibilities have evolved over the years to meet the changing needs of the economy, and it continues to adapt to the dynamic global financial landscape. The RBI’s effective policy-making and stringent supervision have been instrumental in maintaining the financial stability of the country.

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

• Essay on Rat
• Essay on Rani Laxmi Bai
• Essay on Ramayana

Apart from these, you can look at all the essays by clicking here .

Happy studying!

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

• Insights IAS Brochure |
• OUR CENTERS Bangalore Delhi Lucknow Mysuru --> Srinagar Dharwad Hyderabad

Call us @ 08069405205

Search Here

• An Introduction to the CSE Exam
• Personality Test
• Annual Calendar by UPSC-2025
• Common Myths about the Exam
• About Insights IAS
• Our Mission, Vision & Values
• Director's Desk
• Meet Our Team
• Our Branches
• Careers at Insights IAS
• Daily Current Affairs+PIB Summary
• Insights into Editorials
• Insta Revision Modules for Prelims
• Current Affairs Quiz
• Static Quiz
• Current Affairs RTM
• Insta-DART(CSAT)
• Insta 75 Days Revision Tests for Prelims 2024
• Secure (Mains Answer writing)
• Secure Synopsis
• Ethics Case Studies
• Insta Ethics
• Weekly Essay Challenge
• Insta Revision Modules-Mains
• Insta 75 Days Revision Tests for Mains
• Secure (Archive)
• Anthropology
• Law Optional
• Kannada Literature
• Public Administration
• English Literature
• Medical Science
• Mathematics
• Commerce & Accountancy
• Monthly Magazine: CURRENT AFFAIRS 30
• Content for Mains Enrichment (CME)
• InstaMaps: Important Places in News
• Weekly CA Magazine
• The PRIME Magazine
• Insta Revision Modules-Prelims
• Insta-DART(CSAT) Quiz
• Insta 75 days Revision Tests for Prelims 2022
• Insights SECURE(Mains Answer Writing)
• Interview Transcripts
• Previous Years' Question Papers-Prelims
• Answer Keys for Prelims PYQs
• Solve Prelims PYQs
• Previous Years' Question Papers-Mains
• UPSC CSE Syllabus
• Toppers from Insights IAS
• Testimonials
• Felicitation
• UPSC Results
• Indian Heritage & Culture
• Ancient Indian History
• Medieval Indian History
• Modern Indian History
• World History
• World Geography
• Indian Geography
• Indian Society
• Social Justice
• International Relations
• Agriculture
• Environment & Ecology
• Disaster Management
• Science & Technology
• Security Issues
• Ethics, Integrity and Aptitude
• Insights IAS Brochure

• Indian Heritage & Culture
• Enivornment & Ecology

• How to Study Art & Culture?
• What is Art and Culture? What is the difference between the two?
• Indus Civilization
• Evolution of rock-cut architecture in India
• Important rock-cut caves
• The contribution of Pallavas to Rock-cut architecture
• Comparision of art form found at Ellora and Mahabalipuram
• Buddhist Architecture
• Early Temples in India
• Basic form of Hindu temple
• Dravida style of temple architecture
• Nagara Style or North India Temple style
• Vesara style of temple architecture
• Characteristic features of Indo-Islamic form of architecture
• Styles of Islamic architecture in the Indian subcontinent
• Types of buildings in Islamic architecture in the Indian subcontinent
• Evolution of this form of architecture during the medieval period
• Modern Architecture
• Post-Independence architecture
• Indus Civilization Sculpture
• Bharhut Sculptures
• Sanchi Sculptures
• Gandhara School of Sculpture
• Mathura School of Sculpture
• Amaravati School of Sculpture
• Gupta Sculpture
• Medieval School of Sculpture
• Modern Indian Sculpture
• Pre Historic Painting
• Mural Paintings & Cave Paintings
• Pala School
• Mughal Paintings
• Bundi School of Painting
• Malwa School
• Mewar School
• Basohli School
• Kangra School
• Decanni School of Painting
• Madhubani Paintings or Mithila paintings
• Pattachitra
• Kalighat Painting
• Modern Indian Paintings
• Personalities Associated to Paintings
• Christianity
• Zoroastrianism
• Six Schools of Philosophy
• Lokayata / Charvaka
• Hindustani Music
• Carnatic Music
• Folk Music Tradition
• Modern Music
• Personalities associated with Music
• Bharatanatyam
• Mohiniattam
• Folk Dances
• Modern Dance in India
• Sanskrit Theatre
• Folk Theatre
• Modern Theatre
• Personalities associated with Theatre
• History of Puppetry
• String Puppetry
• Shadow Puppetry
• Rod Puppetry
• Glove Puppetry
• Indian Cinema and Circus
• Shankaracharya
• Ramanujacharya (1017-1137AD)
• Madhvacharya
• Vallabhacharya
• Kabir (1440-1510 AD)
• Guru Nanak (1469-1538 AD)
• Chaitanya Mahaprabhu
• Shankar Dev
• Purandaradasa
• Samard Ramdas
• Classical Languages
• Scheduled Languages
• Literature in Ancient India
• Buddhist and Jain Literature
• Tamil (Sangam) Literature
• Malayalam Literature
• Telugu Literature
• Medieval Literature
• Modern Literature
• Important characteristics of Fairs and Festivals of India
• Some of the major festivals that are celebrated in India
• Art & Crafts
• Ancient Science & Technology
• Medieval Science & Technology
• Famous Personalities in Science & Technology
• Tangible Cultural Heritage
• Intangible Cultural Heritage
• Cultural Heritage Sites
• Natural Heritage Sites
• Important Institutions
• Important programmes related to promotion and preservation of Indian heritage
• Ochre Colored Pottery (OCP)
• Black and Red Ware (BRW)
• Painted Grey-Ware (PGW)
• Northern Black Polished Ware (NBPW)
• Origin of Martial arts in India
• Various forms of Martial arts in India

Home » Economy » The Reserve bank of India and monetary management » Function of Reserve Bank of India (RBI)

Function of Reserve Bank of India (RBI)

Reserve Bank of India (RBI) is India’s Central bank. It plays a multi-facet role by executing multiple functions such as overseeing monetary policy, issuing currency, managing foreign exchange, working as a bank of government.

RBI played a vital role in ensuring economic and financial stability.

RBI’s Previous Functions

• Before inflation targeting was formally introduced in 2016, RBI was doing multiple roles.
• They were responsible for growth by managing liquidity as well as interest rates.
• They contributed in inflation management by adjusting liquidity and interest rates.
• They borrowed money on behalf of the government to keep them functioning.
• They also took care of the financial system’s stability by supervising banks and NBFCs.
• Nobel laureate Joseph Stiglitz made a statement that if RBI Governor was the governor of the US Fed then the sub-prime crisis would not have occurred.

Role of Reserve Bank of India

• The central bank issues and regulates currency notes.
• It keeps reserves with a view to securing monetary stability and is called banker to banks.
• The RBI plays a vital role in economic growth of the country and maintaining price stability.
• Monetary Policy of the Country: The RBI has been tasked to have a monetary policy framework to meet the challenges of the economy and to maintain price stability while keeping in mind the objective of growth.
• Inflation control: The RBI has targeted to keep the mid-term inflation at 4 four percent (+/- 2 percent).
• Decides benchmark interest rate: A six-member Monetary Policy Committee, headed by RBI Governor, decides the benchmark repo rate.
• Government’s banker: RBI acts as a banker for both the central as well as state governments. It sells and purchases government securities on their behalf.
• Regulator of Foreign Exchange: Foreign Exchange Management Act (“FEMA”) envisages that RBI will have a key role in management of foreign exchange.
• The central bank plays a key role in creating financial awareness among the masses.
• It also supervises if the banks and other financial institutions are doing the job assigned to them regarding financial inclusion.

• Our Mission, Vision & Values
• Director’s Desk
• Commerce & Accountancy
• Previous Years’ Question Papers-Prelims
• Previous Years’ Question Papers-Mains
• Environment & Ecology
• Science & Technology

• Search Menu

Sign in through your institution

• Browse content in Arts and Humanities
• Browse content in Archaeology
• Anglo-Saxon and Medieval Archaeology
• Archaeological Methodology and Techniques
• Archaeology by Region
• Archaeology of Religion
• Archaeology of Trade and Exchange
• Biblical Archaeology
• Contemporary and Public Archaeology
• Environmental Archaeology
• Historical Archaeology
• History and Theory of Archaeology
• Industrial Archaeology
• Landscape Archaeology
• Mortuary Archaeology
• Prehistoric Archaeology
• Underwater Archaeology
• Urban Archaeology
• Zooarchaeology
• Browse content in Architecture
• Architectural Structure and Design
• History of Architecture
• Residential and Domestic Buildings
• Theory of Architecture
• Browse content in Art
• Art Subjects and Themes
• History of Art
• Industrial and Commercial Art
• Theory of Art
• Biographical Studies
• Byzantine Studies
• Browse content in Classical Studies
• Classical History
• Classical Philosophy
• Classical Mythology
• Classical Numismatics
• Classical Literature
• Classical Reception
• Classical Art and Architecture
• Classical Oratory and Rhetoric
• Greek and Roman Epigraphy
• Greek and Roman Law
• Greek and Roman Archaeology
• Greek and Roman Papyrology
• Late Antiquity
• Religion in the Ancient World
• Social History
• Digital Humanities
• Browse content in History
• Colonialism and Imperialism
• Diplomatic History
• Environmental History
• Genealogy, Heraldry, Names, and Honours
• Genocide and Ethnic Cleansing
• Historical Geography
• History by Period
• History of Agriculture
• History of Education
• History of Emotions
• History of Gender and Sexuality
• Industrial History
• Intellectual History
• International History
• Labour History
• Legal and Constitutional History
• Local and Family History
• Maritime History
• Military History
• National Liberation and Post-Colonialism
• Oral History
• Political History
• Public History
• Regional and National History
• Revolutions and Rebellions
• Slavery and Abolition of Slavery
• Social and Cultural History
• Theory, Methods, and Historiography
• Urban History
• World History
• Browse content in Language Teaching and Learning
• Language Learning (Specific Skills)
• Language Teaching Theory and Methods
• Browse content in Linguistics
• Applied Linguistics
• Cognitive Linguistics
• Computational Linguistics
• Forensic Linguistics
• Grammar, Syntax and Morphology
• Historical and Diachronic Linguistics
• History of English
• Language Acquisition
• Language Variation
• Language Families
• Language Evolution
• Language Reference
• Lexicography
• Linguistic Theories
• Linguistic Typology
• Linguistic Anthropology
• Phonetics and Phonology
• Psycholinguistics
• Sociolinguistics
• Translation and Interpretation
• Writing Systems
• Browse content in Literature
• Bibliography
• Children's Literature Studies
• Literary Studies (Asian)
• Literary Studies (European)
• Literary Studies (Eco-criticism)
• Literary Studies (Modernism)
• Literary Studies (Romanticism)
• Literary Studies (American)
• Literary Studies - World
• Literary Studies (1500 to 1800)
• Literary Studies (19th Century)
• Literary Studies (20th Century onwards)
• Literary Studies (African American Literature)
• Literary Studies (British and Irish)
• Literary Studies (Early and Medieval)
• Literary Studies (Fiction, Novelists, and Prose Writers)
• Literary Studies (Gender Studies)
• Literary Studies (Graphic Novels)
• Literary Studies (History of the Book)
• Literary Studies (Plays and Playwrights)
• Literary Studies (Poetry and Poets)
• Literary Studies (Postcolonial Literature)
• Literary Studies (Queer Studies)
• Literary Studies (Science Fiction)
• Literary Studies (Travel Literature)
• Literary Studies (War Literature)
• Literary Studies (Women's Writing)
• Literary Theory and Cultural Studies
• Mythology and Folklore
• Shakespeare Studies and Criticism
• Browse content in Media Studies
• Browse content in Music
• Applied Music
• Dance and Music
• Ethics in Music
• Ethnomusicology
• Gender and Sexuality in Music
• Medicine and Music
• Music Cultures
• Music and Religion
• Music and Culture
• Music and Media
• Music Education and Pedagogy
• Music Theory and Analysis
• Musical Scores, Lyrics, and Libretti
• Musical Structures, Styles, and Techniques
• Musicology and Music History
• Performance Practice and Studies
• Race and Ethnicity in Music
• Sound Studies
• Browse content in Performing Arts
• Browse content in Philosophy
• Aesthetics and Philosophy of Art
• Epistemology
• Feminist Philosophy
• History of Western Philosophy
• Meta-Philosophy
• Metaphysics
• Moral Philosophy
• Non-Western Philosophy
• Philosophy of Science
• Philosophy of Action
• Philosophy of Law
• Philosophy of Religion
• Philosophy of Language
• Philosophy of Mind
• Philosophy of Perception
• Philosophy of Mathematics and Logic
• Practical Ethics
• Social and Political Philosophy
• Browse content in Religion
• Biblical Studies
• Christianity
• East Asian Religions
• History of Religion
• Judaism and Jewish Studies
• Qumran Studies
• Religion and Education
• Religion and Health
• Religion and Politics
• Religion and Science
• Religion and Law
• Religion and Art, Literature, and Music
• Religious Studies
• Browse content in Society and Culture
• Cookery, Food, and Drink
• Cultural Studies
• Customs and Traditions
• Ethical Issues and Debates
• Hobbies, Games, Arts and Crafts
• Natural world, Country Life, and Pets
• Popular Beliefs and Controversial Knowledge
• Sports and Outdoor Recreation
• Technology and Society
• Travel and Holiday
• Visual Culture
• Browse content in Law
• Arbitration
• Browse content in Company and Commercial Law
• Commercial Law
• Company Law
• Browse content in Comparative Law
• Systems of Law
• Competition Law
• Browse content in Constitutional and Administrative Law
• Government Powers
• Judicial Review
• Local Government Law
• Military and Defence Law
• Parliamentary and Legislative Practice
• Construction Law
• Contract Law
• Browse content in Criminal Law
• Criminal Procedure
• Criminal Evidence Law
• Sentencing and Punishment
• Employment and Labour Law
• Environment and Energy Law
• Browse content in Financial Law
• Banking Law
• Insolvency Law
• History of Law
• Human Rights and Immigration
• Intellectual Property Law
• Browse content in International Law
• Private International Law and Conflict of Laws
• Public International Law
• IT and Communications Law
• Jurisprudence and Philosophy of Law
• Law and Politics
• Law and Society
• Browse content in Legal System and Practice
• Courts and Procedure
• Legal Skills and Practice
• Legal System - Costs and Funding
• Primary Sources of Law
• Regulation of Legal Profession
• Medical and Healthcare Law
• Browse content in Policing
• Criminal Investigation and Detection
• Police and Security Services
• Police Procedure and Law
• Police Regional Planning
• Browse content in Property Law
• Personal Property Law
• Restitution
• Study and Revision
• Terrorism and National Security Law
• Browse content in Trusts Law
• Wills and Probate or Succession
• Browse content in Medicine and Health
• Browse content in Allied Health Professions
• Arts Therapies
• Clinical Science
• Dietetics and Nutrition
• Occupational Therapy
• Operating Department Practice
• Physiotherapy
• Radiography
• Speech and Language Therapy
• Browse content in Anaesthetics
• General Anaesthesia
• Browse content in Clinical Medicine
• Acute Medicine
• Cardiovascular Medicine
• Clinical Genetics
• Clinical Pharmacology and Therapeutics
• Dermatology
• Endocrinology and Diabetes
• Gastroenterology
• Genito-urinary Medicine
• Geriatric Medicine
• Infectious Diseases
• Medical Oncology
• Medical Toxicology
• Pain Medicine
• Palliative Medicine
• Rehabilitation Medicine
• Respiratory Medicine and Pulmonology
• Rheumatology
• Sleep Medicine
• Sports and Exercise Medicine
• Clinical Neuroscience
• Community Medical Services
• Critical Care
• Emergency Medicine
• Forensic Medicine
• Haematology
• History of Medicine
• Browse content in Medical Dentistry
• Oral and Maxillofacial Surgery
• Paediatric Dentistry
• Restorative Dentistry and Orthodontics
• Surgical Dentistry
• Medical Ethics
• Browse content in Medical Skills
• Clinical Skills
• Communication Skills
• Nursing Skills
• Surgical Skills
• Medical Statistics and Methodology
• Browse content in Neurology
• Clinical Neurophysiology
• Neuropathology
• Nursing Studies
• Browse content in Obstetrics and Gynaecology
• Gynaecology
• Occupational Medicine
• Ophthalmology
• Otolaryngology (ENT)
• Browse content in Paediatrics
• Neonatology
• Browse content in Pathology
• Chemical Pathology
• Clinical Cytogenetics and Molecular Genetics
• Histopathology
• Medical Microbiology and Virology
• Patient Education and Information
• Browse content in Pharmacology
• Psychopharmacology
• Browse content in Popular Health
• Caring for Others
• Complementary and Alternative Medicine
• Self-help and Personal Development
• Browse content in Preclinical Medicine
• Cell Biology
• Molecular Biology and Genetics
• Reproduction, Growth and Development
• Primary Care
• Professional Development in Medicine
• Browse content in Psychiatry
• Addiction Medicine
• Child and Adolescent Psychiatry
• Forensic Psychiatry
• Learning Disabilities
• Old Age Psychiatry
• Psychotherapy
• Browse content in Public Health and Epidemiology
• Epidemiology
• Public Health
• Browse content in Radiology
• Clinical Radiology
• Interventional Radiology
• Nuclear Medicine
• Radiation Oncology
• Reproductive Medicine
• Browse content in Surgery
• Cardiothoracic Surgery
• Gastro-intestinal and Colorectal Surgery
• General Surgery
• Neurosurgery
• Paediatric Surgery
• Peri-operative Care
• Plastic and Reconstructive Surgery
• Surgical Oncology
• Transplant Surgery
• Trauma and Orthopaedic Surgery
• Vascular Surgery
• Browse content in Science and Mathematics
• Browse content in Biological Sciences
• Aquatic Biology
• Biochemistry
• Bioinformatics and Computational Biology
• Developmental Biology
• Ecology and Conservation
• Evolutionary Biology
• Genetics and Genomics
• Microbiology
• Molecular and Cell Biology
• Natural History
• Plant Sciences and Forestry
• Research Methods in Life Sciences
• Structural Biology
• Systems Biology
• Zoology and Animal Sciences
• Browse content in Chemistry
• Analytical Chemistry
• Computational Chemistry
• Crystallography
• Environmental Chemistry
• Industrial Chemistry
• Inorganic Chemistry
• Materials Chemistry
• Medicinal Chemistry
• Mineralogy and Gems
• Organic Chemistry
• Physical Chemistry
• Polymer Chemistry
• Study and Communication Skills in Chemistry
• Theoretical Chemistry
• Browse content in Computer Science
• Artificial Intelligence
• Computer Architecture and Logic Design
• Game Studies
• Human-Computer Interaction
• Mathematical Theory of Computation
• Programming Languages
• Software Engineering
• Systems Analysis and Design
• Virtual Reality
• Browse content in Computing
• Business Applications
• Computer Security
• Computer Games
• Computer Networking and Communications
• Digital Lifestyle
• Graphical and Digital Media Applications
• Operating Systems
• Browse content in Earth Sciences and Geography
• Atmospheric Sciences
• Environmental Geography
• Geology and the Lithosphere
• Maps and Map-making
• Meteorology and Climatology
• Oceanography and Hydrology
• Palaeontology
• Physical Geography and Topography
• Regional Geography
• Soil Science
• Urban Geography
• Browse content in Engineering and Technology
• Agriculture and Farming
• Biological Engineering
• Civil Engineering, Surveying, and Building
• Electronics and Communications Engineering
• Energy Technology
• Engineering (General)
• Environmental Science, Engineering, and Technology
• History of Engineering and Technology
• Mechanical Engineering and Materials
• Technology of Industrial Chemistry
• Transport Technology and Trades
• Browse content in Environmental Science
• Applied Ecology (Environmental Science)
• Conservation of the Environment (Environmental Science)
• Environmental Sustainability
• Environmentalist Thought and Ideology (Environmental Science)
• Management of Land and Natural Resources (Environmental Science)
• Natural Disasters (Environmental Science)
• Nuclear Issues (Environmental Science)
• Pollution and Threats to the Environment (Environmental Science)
• Social Impact of Environmental Issues (Environmental Science)
• History of Science and Technology
• Browse content in Materials Science
• Ceramics and Glasses
• Composite Materials
• Metals, Alloying, and Corrosion
• Nanotechnology
• Browse content in Mathematics
• Applied Mathematics
• Biomathematics and Statistics
• History of Mathematics
• Mathematical Education
• Mathematical Finance
• Mathematical Analysis
• Numerical and Computational Mathematics
• Probability and Statistics
• Pure Mathematics
• Browse content in Neuroscience
• Cognition and Behavioural Neuroscience
• Development of the Nervous System
• Disorders of the Nervous System
• History of Neuroscience
• Invertebrate Neurobiology
• Molecular and Cellular Systems
• Neuroendocrinology and Autonomic Nervous System
• Neuroscientific Techniques
• Sensory and Motor Systems
• Browse content in Physics
• Astronomy and Astrophysics
• Atomic, Molecular, and Optical Physics
• Biological and Medical Physics
• Classical Mechanics
• Computational Physics
• Condensed Matter Physics
• Electromagnetism, Optics, and Acoustics
• History of Physics
• Mathematical and Statistical Physics
• Measurement Science
• Nuclear Physics
• Particles and Fields
• Plasma Physics
• Quantum Physics
• Relativity and Gravitation
• Semiconductor and Mesoscopic Physics
• Browse content in Psychology
• Affective Sciences
• Clinical Psychology
• Cognitive Neuroscience
• Cognitive Psychology
• Criminal and Forensic Psychology
• Developmental Psychology
• Educational Psychology
• Evolutionary Psychology
• Health Psychology
• History and Systems in Psychology
• Music Psychology
• Neuropsychology
• Organizational Psychology
• Psychological Assessment and Testing
• Psychology of Human-Technology Interaction
• Psychology Professional Development and Training
• Research Methods in Psychology
• Social Psychology
• Browse content in Social Sciences
• Browse content in Anthropology
• Anthropology of Religion
• Human Evolution
• Medical Anthropology
• Physical Anthropology
• Regional Anthropology
• Social and Cultural Anthropology
• Theory and Practice of Anthropology
• Browse content in Business and Management
• Business Strategy
• Business History
• Business Ethics
• Business and Government
• Business and Technology
• Business and the Environment
• Comparative Management
• Corporate Governance
• Corporate Social Responsibility
• Entrepreneurship
• Health Management
• Human Resource Management
• Industrial and Employment Relations
• Industry Studies
• Information and Communication Technologies
• International Business
• Knowledge Management
• Management and Management Techniques
• Operations Management
• Organizational Theory and Behaviour
• Pensions and Pension Management
• Public and Nonprofit Management
• Social Issues in Business and Management
• Strategic Management
• Supply Chain Management
• Browse content in Criminology and Criminal Justice
• Criminal Justice
• Criminology
• Forms of Crime
• International and Comparative Criminology
• Youth Violence and Juvenile Justice
• Development Studies
• Browse content in Economics
• Agricultural, Environmental, and Natural Resource Economics
• Asian Economics
• Behavioural Finance
• Behavioural Economics and Neuroeconomics
• Econometrics and Mathematical Economics
• Economic Systems
• Economic Methodology
• Economic History
• Economic Development and Growth
• Financial Markets
• Financial Institutions and Services
• General Economics and Teaching
• Health, Education, and Welfare
• History of Economic Thought
• International Economics
• Labour and Demographic Economics
• Law and Economics
• Macroeconomics and Monetary Economics
• Microeconomics
• Public Economics
• Urban, Rural, and Regional Economics
• Welfare Economics
• Browse content in Education
• Adult Education and Continuous Learning
• Care and Counselling of Students
• Early Childhood and Elementary Education
• Educational Equipment and Technology
• Educational Research Methodology
• Educational Strategies and Policy
• Higher and Further Education
• Organization and Management of Education
• Philosophy and Theory of Education
• Schools Studies
• Secondary Education
• Teaching of a Specific Subject
• Teaching of Specific Groups and Special Educational Needs
• Teaching Skills and Techniques
• Browse content in Environment
• Applied Ecology (Social Science)
• Climate Change
• Conservation of the Environment (Social Science)
• Environmentalist Thought and Ideology (Social Science)
• Management of Land and Natural Resources (Social Science)
• Natural Disasters (Environment)
• Pollution and Threats to the Environment (Social Science)
• Social Impact of Environmental Issues (Social Science)
• Sustainability
• Browse content in Human Geography
• Cultural Geography
• Economic Geography
• Political Geography
• Browse content in Interdisciplinary Studies
• Communication Studies
• Museums, Libraries, and Information Sciences
• Browse content in Politics
• African Politics
• Asian Politics
• Chinese Politics
• Comparative Politics
• Conflict Politics
• Elections and Electoral Studies
• Environmental Politics
• Ethnic Politics
• European Union
• Foreign Policy
• Gender and Politics
• Human Rights and Politics
• Indian Politics
• International Relations
• International Organization (Politics)
• Irish Politics
• Latin American Politics
• Middle Eastern Politics
• Political Methodology
• Political Communication
• Political Philosophy
• Political Sociology
• Political Theory
• Political Behaviour
• Political Economy
• Political Institutions
• Politics and Law
• Politics of Development
• Public Administration
• Public Policy
• Qualitative Political Methodology
• Quantitative Political Methodology
• Regional Political Studies
• Russian Politics
• Security Studies
• State and Local Government
• UK Politics
• US Politics
• Browse content in Regional and Area Studies
• African Studies
• Asian Studies
• East Asian Studies
• Japanese Studies
• Latin American Studies
• Middle Eastern Studies
• Native American Studies
• Scottish Studies
• Browse content in Research and Information
• Research Methods
• Browse content in Social Work
• Addictions and Substance Misuse
• Adoption and Fostering
• Care of the Elderly
• Child and Adolescent Social Work
• Couple and Family Social Work
• Direct Practice and Clinical Social Work
• Emergency Services
• Human Behaviour and the Social Environment
• International and Global Issues in Social Work
• Mental and Behavioural Health
• Social Justice and Human Rights
• Social Policy and Advocacy
• Social Work and Crime and Justice
• Social Work Macro Practice
• Social Work Practice Settings
• Social Work Research and Evidence-based Practice
• Welfare and Benefit Systems
• Browse content in Sociology
• Childhood Studies
• Community Development
• Comparative and Historical Sociology
• Disability Studies
• Economic Sociology
• Gender and Sexuality
• Gerontology and Ageing
• Health, Illness, and Medicine
• Marriage and the Family
• Migration Studies
• Occupations, Professions, and Work
• Organizations
• Population and Demography
• Race and Ethnicity
• Social Theory
• Social Movements and Social Change
• Social Research and Statistics
• Social Stratification, Inequality, and Mobility
• Sociology of Religion
• Sociology of Education
• Sport and Leisure
• Urban and Rural Studies
• Browse content in Warfare and Defence
• Defence Strategy, Planning, and Research
• Land Forces and Warfare
• Military Administration
• Military Life and Institutions
• Naval Forces and Warfare
• Other Warfare and Defence Issues
• Peace Studies and Conflict Resolution
• Weapons and Equipment

• < Previous chapter
• Next chapter >

4 Reserve Bank of India: The Way Forward

• Published: May 2017
• Cite Icon Cite
• Permissions Icon Permissions

The RBI was set up to conduct monetary policy, manage public debt and foreign exchange reserves, act as the government’s banker, and support the development of markets and financial institutions. This chapter reviews how the institution has fared on these various dimensions. It begins by examining the appointment process for the Governor and the monetary policy committee. Next, it assesses the importance of an independent debt management agency and consistency between debt management and monetary policy. The connection between monetary policy and macroprudential policy is discussed next. Large foreign exchange reserves may be viewed by government at some time as a source for a national investment fund. This requires the RBI to engage with government and to define the objective of reserves management. The RBI’s actions to improve the resilience of financial markets and its involvement with social and distributional goals of directing credit towards priority activities are also evaluated.

Signed in as

Institutional accounts.

• Google Scholar Indexing
• GoogleCrawler [DO NOT DELETE]

Personal account

• Sign in with email/username & password
• Get email alerts
• Save searches
• Purchase content
• Activate your purchase/trial code
• Add your ORCID iD

Institutional access

Sign in with a library card.

• Sign in with username/password
• Recommend to your librarian
• Institutional account management
• Get help with access

Access to content on Oxford Academic is often provided through institutional subscriptions and purchases. If you are a member of an institution with an active account, you may be able to access content in one of the following ways:

IP based access

Typically, access is provided across an institutional network to a range of IP addresses. This authentication occurs automatically, and it is not possible to sign out of an IP authenticated account.

Choose this option to get remote access when outside your institution. Shibboleth/Open Athens technology is used to provide single sign-on between your institution’s website and Oxford Academic.

• Click Sign in through your institution.
• Select your institution from the list provided, which will take you to your institution's website to sign in.
• When on the institution site, please use the credentials provided by your institution. Do not use an Oxford Academic personal account.
• Following successful sign in, you will be returned to Oxford Academic.

If your institution is not listed or you cannot sign in to your institution’s website, please contact your librarian or administrator.

Enter your library card number to sign in. If you cannot sign in, please contact your librarian.

Society Members

Society member access to a journal is achieved in one of the following ways:

Sign in through society site

Many societies offer single sign-on between the society website and Oxford Academic. If you see ‘Sign in through society site’ in the sign in pane within a journal:

• Click Sign in through society site.
• When on the society site, please use the credentials provided by that society. Do not use an Oxford Academic personal account.

If you do not have a society account or have forgotten your username or password, please contact your society.

Sign in using a personal account

Some societies use Oxford Academic personal accounts to provide access to their members. See below.

A personal account can be used to get email alerts, save searches, purchase content, and activate subscriptions.

Some societies use Oxford Academic personal accounts to provide access to their members.

Viewing your signed in accounts

Click the account icon in the top right to:

• View your signed in personal account and access account management features.
• View the institutional accounts that are providing access.

Signed in but can't access content

Oxford Academic is home to a wide variety of products. The institutional subscription may not cover the content that you are trying to access. If you believe you should have access to that content, please contact your librarian.

For librarians and administrators, your personal account also provides access to institutional account management. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more.

Our books are available by subscription or purchase to libraries and institutions.

• About Oxford Academic
• Publish journals with us
• University press partners
• What we publish
• New features  
• Open access
• Rights and permissions
• Accessibility
• Advertising
• Media enquiries
• Oxford University Press
• Oxford Languages
• University of Oxford

Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide

• Copyright © 2024 Oxford University Press
• Cookie settings
• Cookie policy
• Privacy policy
• Legal notice

This Feature Is Available To Subscribers Only

Sign In or Create an Account

This PDF is available to Subscribers Only

For full access to this pdf, sign in to an existing account, or purchase an annual subscription.

• Profile of Central Board Directors
• Constituted for Western Area, Eastern Area, Northern Area and Southern Area.
• Consist of five members each.
• Members appointed by the Central Government.
• Member shall hold office for a term of four years.

Functions : To advise the Central Board on local matters and to represent territorial and economic interests of local cooperative and indigenous banks; to perform such other functions as delegated by Central Board from time to time.

Western Area

EASTERN AREA

Northern Area

SOUTHERN AREA

The Board for Financial Supervision (BFS) was constituted in November 1994 as a committee of the Central Board of Directors of the Reserve Bank of India under the Reserve Bank of India (Board for Financial Supervision) Regulations, 1994.

The BFS was set up to strengthen supervision and surveillance over the financial system and providing sharper focus to supervisory policy and skills.

The BFS exercises integrated supervision over commercial banks, financial institutions and non-banking financial intermediaries. The Department of Supervision assists and provides secretarial support to BFS.

Legal Framework

• Reserve Bank of India Act, 1934
• Public Debt Act, 1944 / Government Securities Act, 2006
• Government Securities Regulations, 2007
• Banking Regulation Act, 1949
• Foreign Exchange Management Act, 1999
• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Chapter II)
• Credit Information Companies (Regulation) Act, 2005
• Payment and Settlement Systems Act, 2007 As Amended up to 2019
• Payment and Settlement Systems Regulations, 2008 As Amended up to 2022
• Factoring Regulation Act, 2011
• Negotiable Instruments Act, 1881
• Bankers' Books Evidence Act, 1891
• State Bank of India Act, 1955
• Companies Act, 1956/ Companies Act, 2013
• Securities Contract (Regulation) Act, 1956
• State Bank of India (Subsidiary Banks) Act, 1959
• Deposit Insurance and Credit Guarantee Corporation Act, 1961
• Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
• Regional Rural Banks Act, 1976
• Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
• National Bank for Agriculture and Rural Development Act, 1981
• National Housing Bank Act, 1987
• Recovery of Debts Due to Banks and Financial Institutions Act, 1993
• Competition Act, 2002
• Indian Coinage Act, 2011 : Governs currency and coins
• Banking Secrecy Act
• The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003
• The Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993
• Formulates, implements and monitors the monetary policy.
• Objective: maintaining price stability while keeping in mind the objective of growth.
• Prescribes broad parameters of banking operations within which the country's banking and financial system functions.
• Objective: maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public.
• Manages the Foreign Exchange Management Act, 1999.
• Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
• Issues, exchanges and destroys currency notes as well as puts into circulation coins minted by Government of India.
• Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
• Performs a wide range of promotional functions to support national objectives.
• Introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public at large.
• Objective: maintain public confidence in payment and settlement system
• Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
• Banker to banks: maintains banking accounts of all scheduled banks.
• The Reserve Bank of India has offices at 33 locations.
• Four, namely, RBI Academy, College of Agricultural Banking, Reserve Bank of India Staff College and College of Supervisors are part of the Reserve Bank.
• Other autonomous, such as, Institute for Development and Research in Banking Technology (IDRBT)

Institutes Funded by the Bank