Establishment of RBI

  1. Recommended by Hilton-Young Commission in 1926.
  2. Though it was recommended in 1926, but the Reserve Bank of India Act was passed in the parliament in 1934.
  3. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  4. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937.
  5. The Central Office is where the Governor sits and where policies are formulated.
  6. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.

Preamble of RBI

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- – Dr. Urjit R. Patel
  • Not more than four Deputy Governors
  1. Shri R. Gandhi
  2. Shri S. S. Mundra
  3. Shri N. S. Vishwanathan
  4. Dr. Viral V. Acharya

Non-Official Directors

  • Nominated by Government: ten Directors from various fields and two government Official
  • Others: four Directors – one each from four local boards

Local Boards of RBI

  • One each for the four regions of the country in Mumbai, Calcutta, Chennai and New Delhi
  • consist of five members each
  • appointed by the Central Government
  • for a term of four years