Reserve Bank of India - RBI

Reserve Bank of India (RBI) is India’s Central Bank. RBI was established in 1935 as per Reserve Bank of India Act, 1934.
It was nationalized in 1949. It has approximate 22 Regional Offices across India.

RBI’s main Objectives:

Monetary Authority
· Formulates implements and monitors the monetary policy.
Why?
To maintain price stability and to ensure adequate flow of credit to productive sectors. In simple terms RBI decides how much money should float in the market in order to keep the inflation within reasonable limits in line with the economic growth.

Regulator and supervisor of the financial system.
· By prescribing broad parameters of banking operations
Why?
To maintain public confidence in the Banking system, protect depositor’s interest and to provide cost-effective banking services to the public.

Manager of Exchange Control
· Manages the Foreign Exchange Management Act, 1999.
Why?
To facilitate external trade and payment and promote orderly development and maintenance of foreign Exchange market in India.
Predominantly this means managing or monitoring the Exports and Imports of the country as a whole.

Issuer of currency – Note Issuing Authority
· Issues and exchanges currency or destroys currency and coins not fit for circulation. That is why we see the name “Reserve Bank of India” on our currency notes with the promise by the RBI Governor.

Some other major Roles of RBI are:
· Banker to Government of India.
· Gold Trade Regulator.
· Buys and sells foreign currencies to maintain exchange rates.

Term of the Day Ombudsman

An Ombudsman is usually an official appointed by government or parliament who is charged with representing the interests of the public by investigating and addressing complaints reported by individual citizens. Similarly on these lines a banking Ombudsman is very much prevalent in India to act as a redressal forum for customer complaints on banking industry.

Did You know?
RBI was set up on Recommendation of the Report submitted by Hilton Young Commission in 1926.
RBI’s Central Board of Directors has Azim Premji and Kumar Mangalam Birla.