The Reserve Bank of India (RBI) is India’s central bank and regulatory body, responsible for overseeing the Indian banking system. Owned by the Ministry of Finance, Government of India, the RBI is tasked with controlling the issuance and maintaining the supply of the Indian rupee. Additionally, it manages the country’s main payment systems and promotes economic development.
Currency Management
The Bharatiya Reserve Bank Note Mudran (BRBNM) is a specialized division of the RBI responsible for printing and minting Indian currency notes (INR). This division operates two currency printing presses located in:
- Mysore, Karnataka (Southern India)
- Salboni, West Bengal (Eastern India)
Payment Systems
In collaboration with the Indian Banks’ Association, the RBI established the National Payments Corporation of India (NPCI) to promote and regulate payment and settlement systems in India. The Deposit Insurance and Credit Guarantee Corporation (DICGC), another specialized division of the RBI, provides insurance for deposits and guarantees credit facilities to all Indian banks.
Monetary Policy
Until the establishment of the Monetary Policy Committee in 2016, the RBI had full control over the country’s monetary policy. The RBI commenced its operations on April 1, 1935, in accordance with the Reserve Bank of India Act, 1934. Originally, the share capital was divided into fully paid shares of ₹100 each. The RBI was nationalized on January 1, 1949, almost a year and a half after India’s independence.
Governance
The RBI is governed by a 21-member central board of directors, which includes:
- The Governor
- Four Deputy Governors
- Two representatives from the Ministry of Finance (typically the Economic Affairs Secretary and the Financial Services Secretary)
- Ten government-nominated directors
- Four directors representing local boards for Mumbai, Kolkata, Chennai, and Delhi
Each local board consists of five members who represent regional interests and those of co-operative and indigenous banks.
International Role and Financial Inclusion
The RBI is a member bank of the Asian Clearing Union and is active in promoting financial inclusion policies. It is a leading member of the Alliance for Financial Inclusion (AFI). The RBI is often referred to by the name “Mint Street.”
Additional Information
- Commencement of Operations: April 1, 1935
- Nationalization: January 1, 1949
- Specialized Divisions: Bharatiya Reserve Bank Note Mudran (BRBNM), Deposit Insurance and Credit Guarantee Corporation (DICGC)
- Key Establishments: National Payments Corporation of India (NPCI)
The RBI continues to play a crucial role in shaping India’s financial and economic landscape.