Business, Legal & Accounting Glossary
Reserve Bank of India (RBI) is the central bank of India. It was founded on 1st April 1935 in conformity to the Reserve Bank of India Act, 1934. Reserve Bank of India is wholly owned by the Government of India since 1949. Duwuri Subbarao is the present RBI governor.
Reserve Bank was initially established in Kolkata, but the central office of the financial entity was moved to Mumbai in 1937. The central office is the place where the RBI governor has his or her office. Key financial decisions are taken in the central office.
The introduction or preamble of the Reserve Bank of India clearly states the primary function of the central bank. RBI is entrusted with Bank Notes issue and the maintenance of monetary reserves with the aim to assuring monetary stability in India. Reserve Bank of India also operates Indian currency and utilize India’s credit system to its advantage.
Reserve Bank of India is regulated by a central board of directors. The directorial board is appointed by the Indian government in accordance with the RBI Act. Each member of the board is nominated or appointed for a period of 4 years. The constitution consists of an amalgamation of both official and non-official directors. The list of non-official directors includes four directors nominated from four local boards- one each from Kolkata, Chennai, New Delhi and Mumbai. The four local nominees apprise the RBI board on matters of respective local interest. RBI functions through 22 regional offices, the majority of them is Indian state capitals.
RBI has 3 fully owned subsidiaries: Deposit Insurance and Credit Guarantee Corporation of India (DICGC), Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), and National Housing Bank (NHB). The RBI also holds a majority stake in National Bank for Agriculture and Rural Development (NABARD).
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This glossary post was last updated: 1st April, 2020 | 0 Views.