Reserve bank of India functions & facts with previous year questions

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Dear Aspirants,
Check out the brief notes on “Reserve bank of India functions & facts“. The Reserve Bank of India, mostly known as RBI, is the central bank of India and the regulatory body responsible for regulating the Indian banking system.

About Reserve Bank of India

• RBI was Set up on 1 April 1935 Under the Reserve Bank of India Act, of 1934.
• It was nationalized on 1 January 1949.

• Reserve bank of India is a member bank of the Asian Clearing Union.
• The RBI served as the central bank of Burma (now Myanmar) until April 1947.
• The RBI also served as the central bank of Pakistan until June.

• Initially, RBI was headquartered in Kolkata. In 1937 the headquarters of RBI was shifted to Mumbai.

• The Reserve Bank of India sets up recommendations of the 1926 Hilton–Young Commission.

• Original choice for the seal of RBI was The East India Company Double Mohur, with the sketch of the Lion and Palm Tree.
• It was decided to replace the lion with the tiger, the national animal of India.

• The bank is often referred to by the name Mint Street.
• RBI is also known as a banker’s bank.

• RBI was conceptualized as per the guidelines, working style, and outlook presented by Dr. B. R. Ambedkar in his book titled “The Problem of the Rupee – Its origin.

Also, See Regional Rural Banks of India

Composition of the central board of directors of RBI

◘ RBI is entrusted with a 21-member central board of directors. They are:
• The governor
• 4 deputy governors
• 2 finance ministry representatives
• 10 government-nominated directors
• 4 directors to represent local boards, located in Mumbai, Kolkata, Chennai, and Delhi.

Reserve bank of India logo / Symbol

• The original choice for RBI’s seal was the East India Company’s Double Mohur, which featured a sketch of a lion and a palm tree. Later, it was replaced by the national animal of India, the Tiger.

Reserve bank of India headquarters

• The Reserve Bank of India was established on April 1, 1935, under the provisions of the Reserve Bank of India Act, 1934.

• Initially, the headquarters or central office of the Reserve Bank of India was established in Kolkata but in 1937 it was permanently shifted to Mumbai.

Reserve Bank of India (RBI) – Major Timeline

YearEvent
1934The British enacted the Reserve Bank of India Act
1 April 1935Reserve Bank of India was established in Calcutta (Kolkata)
October, 1935London Office of the RBI set up. ( closed on September 30, 1963)
1937RBI acts as banker to the Government of Burma
1937The headquarters of the Reserve Bank of India is permanently shifted from Kolkata to Mumbai
January, 1938First Reserve Bank notes issued
11 March, 1940RBI Accounting Year changed from Jan-Dec to July-June.
1 January, 1949RBI got nationalized after independence. Earlier the bank was in the hands of private stakeholders.

Reserve bank of India branches and supportive bodies

• There are also four zonal training centers in Mumbai, Chennai, Kolkata, and New Delhi.

21 regional offices and 11 sub-offices throughout India.

◘ 2 training colleges for its officers ___
• Reserve Bank Staff College, Chennai
• College of Agricultural Banking, Pune.

◘ 3 autonomous institutions run by RBI namely ___
• National Institute of Bank Management (NIBM)
• Indira Gandhi Institute of Development Research (IGIDR)
• Institute for Development and Research in Banking Technology (IDRBT).

Governor of Reserve Bank of India facts

Current Governor of RBI: Shaktikanta Das (25th Governor)

Other 4 Deputy Governor list: M.D. Patra, M. Rajeshwar Rao, T. Rabi Sankar, Mahesh Kumar Jain

First governor of the reserve bank of India: Osborne Smith

First Indian governor of the reserve bank of India: CD Deshmukh

• Longest serving governor of the reserve bank of India: Benegal Rama Rau (7 – years)

• Shortest serving governor of the reserve bank of India: Amitav Ghosh (20 – days)

• 15th Governor of reserve bank of India: Manmohan Singh (13th – Prime Minister)

• 24th Governor of reserve bank of India: Urjit Patel

• 23rd Governor of reserve bank of India: Raghuram Rajan

Reserve bank of India functions

Monetary Authority

• Formulates, implements, and monitors monetary policy to maintain price stability with growth.

Regulator and supervisor of the financial system

• RBI regulates and specifies various broad parameters of banking activities within which the banking and financial system of the country functions.

• These regulatory and supervisory functions maintain public confidence in the system, protect the interests of depositors and provide affordable banking services to the public.

Manager of Foreign Exchange

• RBI maintains and manages foreign exchange under the Foreign Exchange Management Act, of 1999.

• It facilitates external trade and payments and promotes orderly development and maintenance of the foreign exchange market in India.

Issuer of currency

• Issues, exchanges and destroys currency notes as well as keeping in circulation currency created by the Government of India to provide an adequate supply of good quality currency notes and coins to the public.

Developmental role

• Performs a wide range of promotional functions to support national objectives.

Regulator and Supervisor of Payment and Settlement Systems

• Introduces and upgrades secure and efficient payment systems in the country to meet public needs and maintain public confidence in payment and settlement systems.

Banker to the Government

• RBI acts as a merchant banking solution and banker for central and state governments.

Banker to banks

• The Reserve Bank of India maintains a cash reserve and provides loans and remittance facilities to all scheduled banks.

Reserve bank of India functions
Reserve bank of India functions

Previous year questions (Asked in SSC)

1.The symbol of Reserve Bank of India is: [SSC CGL Prelim 2002]
Answer: Tiger before a Palm tree

2. Currency notes of Rs. 2 denomination and above are liabilities of : [SSC CGL Prelims 2004]
Answer: Reserve Bank of India

3. Which of the following functions as a controller of credit in India ? [SSC Tax Assistant (Income Tax & Central Excise) 2004]
Answer: The Reserve Bank of India

4. What is the name of the electronic communication network of the Reserve Bank of India ?
Answer: RBINET
[SSC Statistical Investigators Grade–IV 2006]

5. Which of the following has the sole right of issuing currency (except one rupee coins and notes)
in India ? [SSC Section Officer (Commercial Audit) 2007]
Answer: The Reserve Bank of India

6. Reserve Bank of India was nationalised in: [SSC Section Officer (Audit) 2008]
Answer: 1949

7. The credit control operation in India is performed by__[SSC Combined Matric Level (PRE) 2001]
Answer: Reserve Bank of India

8. The Reserve Bank of India issues currency notes under
Answer: Minimum reserve system
[SSC Combined Matric Level (PRE) 2001]

9. Which bank in India performs duties of the Central Bank?
[SSC Combined Matric Level (PRE) 2008]
Answer: Reserve Bank of India

10. Who amongst the following has never been the Governor of Reserve Bank of India ? [SSC (10+2) Level Data Entry Operator & LDC 2012]
A. D. Subbarao
B. C. Rangarajan
C. B.B. Bhattacharya
D. Y.V. Reddy
Answer: B.B. Bhattacharya

11. The Monetary and Credit Policy is announced by which of the following? [SSC CGL Tier-I 2014]
Answer: Reserve Bank of India

12. Who was the first Indian governor of the Reserve Bank of India? [SSC CGL Tier-I (CBE) 2016]
Answer: C.D. Deshmukh

Frequently Asked Questions (FAQ)

Q1. The reserve bank of India was established in which year?

Answer: 1 April 1935

Q2. Reserve bank of India foundation day?

Answer: 1st April

Q3. Reserve bank of India was nationalized on?

Answer: 1 January 1949

Q4. Who was the first governor of the reserve bank of India?

Answer: Osborne Smith

Q5. Who is the present governor of the reserve bank of India?

Answer: Shaktikanta Das (25th Governor)


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