Reserve Bank Of India

Reserve Bank of India is the central bank in the country. Central banks are relatively new, and most central banks, as we know them today were established around the beginning of the twentieth century.

Reserve Bank of India was established on the basis of recommendations from the Hilton Young Commission. Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis for the operation of the bank, which started its work on 1 April 1935th

The Bank was established to

* Adjusts the issue of banknotes

* Maintain reserves to ensure monetary stability and

* Management of credit and currency system in the country to its advantage.

The Bank started its business by taking over government functions previously performed by the controller of the currency and the Imperial Bank of India, the management of public accounts and public debt. The existing foreign exchange offices in Calcutta, Bombay, Madras, Rangoon, Karachi, Lahore and Cawnpore (Kanpur) were branches of the Issue Department. Offices of the Banking Department was established in Calcutta, Bombay, Madras, New Delhi and Rangoon.

Burma (Myanmar) came out of the Indian Union in 1937, but the Reserve Bank continued to act as the European Central Bank to Burma till Japanese occupation of Burma and later up to April 1947th After the partition of India, Reserve Bank served as the Central Bank of Pakistan until June 1948, began the State Bank of Pakistan operations. The Bank, originally established as a shareholder bank, was nationalized in 1949.

An interesting feature of the Reserve Bank of India was that since it was originally perceived as Bank plays a special role in development, especially agriculture. When India began its effort level, the development bank's role came into focus, especially in the sixties, when the Reserve Bank, in many ways pioneered the concept and practice of using funds for a catalyst for development. The bank was also instrumental in developing institutions and helped set up institutions Deposit Insurance and Credit Guarantee Corporation of India, Unit Trust of India, and Industrial Development Bank of India, National Bank for Agriculture and Rural Development, Discount and Finance House of India etc. building the financial infrastructure in the country.

With liberalization, the Bank's focus shifted back to central banks’ central functions such as monetary policy, banking supervision and regulation, and overseeing the payment system, and develops financial markets.

Key Features RBI:

Introduction:

The RBI was established by passing on "the transfer of public ownership Act" in September-1948, after which ownership of

The Bank was adopted in the hands of the Government of India with effect from 1st January 1949th

Features:

They are grouped under three heads, namely

A) Traditional features

B) Promotional functions and

C) Supervisory functions. Let us look at these account heads.

A) Traditional features :

1. Monopoly of issuing banknotes

2. Banker to the government (both central and state)

3. Agent and advisor to the government

4. Banker to banker

5. Serve as a clearing house in the country

6. Lender of last resort

7. Custodian of foreign reserves

8. Maintaining the external value of domestic currency

9. Controller of Foreign Exchange and Credit

10. Ensures the intrinsic value of the currency

11. Publish economic statistics

12. Anti-economic crisis and ensure stability in the Indian economy.

B) Promotional functions

1. Promoting the banking habit and the expansion of banking systems.

2. Provides refinance for export promotion

3. Expansion of facilities for the supply of agricultural credit through NABARD

4. Expansion of facilities for small businesses

5. Help for Co-operative sectors.

6. Prescribe legal requirements.

7. Innovating the new bank's business.

C) Supervisory functions

1. Appropriation authorized banks.

2. Inspect and carry out investigations or to determine its position in connection with cases under various sections of the RBI

Banking Regulation

3. Implements Deposit Insurance

4. Periodically review the operation of commercial banks

5. Give directives to commercial banks

6. Control of Non-Banking Finance Corporation

7. Ensuring the health financial system through on-site and off-site verification.

These are all features that protect the Indian economy, That’s why RBI regarded as the leader of all banks.