The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank Of India Act, 1934. The Central Office of the Reserve Bank has been in Mumbai since inception. The Central Office is where the Governor sits and is where policies are formulated. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.
Preamble
The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as:
"...to regulate the issue of Bank
Notes and keeping of reserves with a view to securing monetary stability in
India and generally to operate the currency and credit system of the country to
its advantage."
Central Board
The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
Appointed/nominated for a period of four years
Constitution:
Official Directors
Full-time: Governor and not more than four Deputy Governors
Non-Official Directors
Nominated by Government: ten Directors from various fields
and one government Official
Others: four Directors - one each from four local
boards
Functions: General superintendence and direction of the
Bank's affairs
Local Boards*One each for the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi *Membership: *Consist of five members each *Appointed by the Central Government *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. Main Functions Of Reserve Bank Of India* Monetary Authority Formulation and Implementation of monetary policies. Maintaining price stability and ensuring adequate flow of credit to the Productive sectors. Regulator and supervisor of the financial system* Prescribes broad parameters of banking operations within which the country's banking and financial system functions. * Maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public. Authority On Foreign Exchange * Manages the Foreign Exchange Management Act, 1999. *Facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India Issuer
of currency: *Issues and exchanges or destroys currency and coins not fit for circulation. *Provide the public adequate quantity of supplies of currency notes and coins and in good quality. Developmental role* Performs a wide range of promotional functions to support national objectives. Related Functions
*Banker to the Government: performs merchant
banking function for the central and the state governments;
also acts as their banker.
Source : RBI
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