RESERVE BANK OF INDIA - Introduction
The Reserve Bank of India is the Central Bank of our country. The Reserve Bank of India is the apex financial institution of the country’s financial system entrusted with the task of control, supervision, promotion, development and planning. Reserve Bank of India came into existence on 1st April, 1935 as per the Reserve Bank of India act 1935. But the bank was nationalised by the government after Independence. It became the public sector bank from 1st January, 1949. Thus, Reserve Bank of India was established as per the Act 1935 and empowerment took place in Banking Regulation Act 1949.
The Reserve Bank of India influences the management of commercial banks through its various policies, directions and regulations. Its role in bank management is quite unique. In fact, the Reserve Bank of India performs the four basic functions of management, viz., planning, organising, directing and controlling in laying a strong foundation for the functioning of commercial banks. Reserve Bank of India has 4 local boards basically in North, South, East and West – Delhi, Chennai, Calcutta, and Mumbai.
Need and Objectives of RBI
The main objectives of the RBI are contained in the preamble of the RBI Act, 1934. It reads ‘Whereas it is expedient to constitute a Reserve Bank for India 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. RBI keeps importance because it was constituted for the following needs: