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- The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$ 300.21 billion (2010) of currency reserves.
- The institution was established on 1 April 1935
- Reserve Bank of India was nationalised in the year 1949.
- Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government.
- Reserve Bank of India is required to maintain gold and foreign exchange reserves of Rs. 200 crores, of which at least Rs. 115 crores should be in gold. The system as it exists today is known as the minimum reserve system
- It formulates, implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors.
- The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply, monitors economic indicators like the gross domestic product and has to decide the design of the rupee banknotes as well as coins.
- The central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
- RBI can issue currency notes as much as the country requires, provided it has to make a security deposit
- The RBI is also a banker to the government and performs merchant banking function for the central and the state governments.
- The institution maintains banking accounts of all scheduled banks, too.
