Reserve Bank (RBI) was nationalized and since then, it has been owned by the government of the country. The bank was established in Calcutta (Kolkata), but was shifted to the business capital Mumbai in 1937. As the central bank of India, Reserve Bank plays the regulatory role of all the other banks in the country. It has the responsibility of issuing bank notes and maintaining the monetary stability of the country. At the same time, it also maintains the credit system of the country.
The Reserve Bank of India (central bank of India) is governed by a board of directors appointed by the Indian government. There are a number of official and non-official directors. The official directors of the bank include the Governor and four Deputy Governors. On the other hand, there are fourteen non-official directors of the bank. At present, Dr. Y.V. Reddy is the Governor of Reserve Bank of India.
Functions of the Reserve Bank of India (central bank of India)
As the apex bank of the country, the Reserve Bank of India plays the most significant role in the financial system of the country. It has been assigned with a number of functions and these are as follows:
Regulating and supervising the financial system of India
The Reserve Bank of India is also called the bankers bank because the banking sector of the country is governed by this bank. The bank has the authority to create or rule out regulations for the banking sector. The Reserve Bank of India delineates certain parameters for the banking operations and each and every bank of the country is bound to maintain those parameters. These initiatives are taken to promote public faith in the banking system of the country.
Issuer of Indian Currency
The Reserve Bank of India is the only financial institution in India that has the authority to issue currency notes and coins for the market. At the same time, it can also destroy the damaged currencies. The bank also has the right to introduce new currencies in the country.
Monetary Authority of the country
The bank has an important responsibility of creating monetary policy for the country that is quite important for the growth of economy. On the other hand, adequate monetary policy ensures price stability and at the same time, it also assures financial assistance for the fertile sectors of the country.
Foreign Exchange Regulator
The Reserve Bank of India also plays a significant role in keeping the foreign exchange market stable. It is the primary authority to manage the foreign exchanges in the country. Through proper management of foreign exchanges, the bank ensures adequate supply of foreign currencies for external trade.
Reserve Bank of India
P.O. Box 10007
Mumbai 400 001
Last Updated on : 27th June 2013