RESERVE BANK OF INDIA History: Formed on April , in accordance with the RBI Act, Nationalized on January , (Fully owned by GOI) Headquarter moved from Calcutta to Mumbai in Osborne Smith was the first Governor of RBI Administration: It is the Central Bank/ Regulator for all banks in India Also called “Lender of Last Resort” Governors and Deputy Governors along with a central board of directors appointed by the GOI. Functions: Issues currency Banker to the government {It collects receipts of funds and makes payments on behalf of the government} Regulator of Indian Banking system Custodian of Forex Controller of credit The process of issuing paper currency was started in the 18th century. Private Banks such as the bank of Bengal the bank of Bombay and the Bank of Madras – first printed paper money. The first rupee was introduced by Sher Shah Suri based on a ratio of copper pieces (paisa) per rupee.
The name was derived from the Sanskrit word Raupya, meaning silver. Each banknote has its amount written in 17languages (English and Hindi on the front and others on the back) illustrating the diversity of the country. . Act as clearing house: For settlement of banking transactions, RBI manages clearing houses.
It facilitates the exchange of instruments and processing of payment instructions. . Custodian of foreign exchange reserves: It acts as a custodian of FOREX. It administers and enforces the provision of Foreign Exchange Management Act (FEMA), .
RBI buys and sells foreign currency to maintain the exchange rate of Indian rupee v/s foreign currencies. . Regulator of Economy: It controls the money supply in the system, monitors different key indicators like GDP, Inflation, etc. - - Banking .
Managing Government securities: RBI administers investments in institutions when they invest specified minimum proportions of their total assets/liabilities in government securities. . Regulator and Supervisor of Payment and Settlement Systems: The Payment