what is Central Bank in India and its functions Financial institution responsible for issuing currency, managing foreign reserves,implementing monetary policy, and providing banking services to the government and commercial banks RBI is the central bank of India.
Several attempts were made from time to time to set up a central bank in India prior to 1934.But unfortunately these attempts failed to bear any fruit in 1921 the government of India established the imperial bank of India to serve as the central bank of the country.But the imperial bank did not achieve any appreciable success in its functioning as the central bank of the country.But the imperial bank did not achieve any appreciable success in its functioning as the central bank of the country. In 1925 the commission made out.In 1925, a commission which is named as the Hilton Young Commission was asked by the Government to express its points on the banking subject. The commission strenuously formation of a brand new Central Bank in the country. According to the Commission, it was not considerable to keep the control of currency and credit in the hands of two separate agencies. The Government of India controlled currency while the Imperial Bank regulated credit prior to the formation of the Reserve Bank of India in April 1st, 1935. The Hilton Young Commission did not desire this double control on currency and credit as a desirable feature of the Indian monetary system.
The Reserve Bank of India is the guru of the Indian money market.It issues notes, buys and sells government securities, regulates the volume, direction and cost of credit, manages foreign exchange and acts as banker to the government and banking institutions.
The Reserve Bank is playing an active role in the development activities by helping the establishment and working of specialized institutions, providing term finance to agriculture, industry, housing and foreign trade. In spite of many criticisms, it has successfully controlled commercial banks in India and has helped in evolving a strong banking system. A study of the Reserve Bank of India will be useful, not only for the examination, but also for understanding the working of the supreme monetary and banking authority in the country.
Organizational structure of the Reserve Bank
Central Board of Directors
the Central Board of Directors consists of 20 members as follows:
The Reserve Bank of India is divided into four regions: the Western, the Eastern, the Northern and the Southern regions. For each of these regions, there is a Local Board, with headquarters in Mumbai, Kolkata, New Delhi and Chennai. Each Local Board consists of five members appointed by the Central Government for four years. They represent territorial and economic interests and the interests of co-operative and indigenous banks in their respective areas. In each Local Board, a chairman is elected from amongst their members. Managers in-charge of the Reserve Bank’s offices in Mumbai, Kolkata, Chennai and New Delhi are ex-officio Secretaries of the respective Local Boards at these places.
what are fuctions of reserve bank of India