HISTORY OF RBI

 The Reserve Bank of India, abbreviated as RBI, is India's central

bank and regulatory body responsible for regulation of the
Indian banking system. It is under the ownership of Ministry of
Finance, Government of India. It is responsible for the control,
issue and maintaining supply of the Indian rupee. It also
manages the country's main payment systems and works to
promote its economic development. Bharatiya Reserve Bank
Note Mudran (BRBNM) is a specialised division of RBI through
which it prints and mints Indian currency notes (INR) in four of
its currency printing presses located in Nashik (Maharashtra;
Western India), Dewas (Madhya Pradesh; Central India),
Mysore (Karnataka; Southern India) and Salboni (West Bengal;
Eastern India).[5] The RBI established the National Payments
Corporation of India as one of its specialised division to
regulate the payment and settlement systems in India. Deposit
Insurance and Credit Guarantee Corporation was established
by RBI as one of its specialised division for the purpose of
providing insurance of deposits and guaranteeing of credit
facilities to all Indian banks.

Until the Monetary Policy Committee was established in 2016,[6] it

also had full control over monetary policy in the country.[7] It
commenced its operations on 1 April 1935 in accordance with the
Reserve Bank of India Act, 1934.[8] The original share capital was
divided into shares of 100 each fully paid.[9] Following India's
independence on 15 August 1947, the RBI was nationalised on 1
January 1949.[10]
The overall direction of the RBI lies with the 21-member central
board of directors, composed of: the governor; four deputy
governors; two finance ministry representatives (usually the
Economic Affairs Secretary and the Financial Services Secretary); ten
government-nominated directors; and four directors who represent
local boards for Mumbai, Kolkata, Chennai, and Delhi. Each of these
local boards consists of five members who represent regional
interests and the interests of co-operative and indigenous banks.

It is a member bank of the Asian Clearing Union. The bank is also

active in promoting financial inclusion policy and is a leading member
of the Alliance for Financial Inclusion (AF I). The bank is often
referred to by the name 'Mint Street

YEARS
1935–1949[edit]
Reserve Bank of India-10 Rupees (1938), the first year of banknote issue.
The Reserve Bank of India was founded on 1 April 1935 to respond to economic troubles after
the First World War.[15] The bank was set up based on the recommendations of the 1926 Royal
Commission on Indian Currency and Finance, also known as the Hilton Young Commission.
[16]
Eventually, the Central Legislative Assembly passed these guidelines as the RBI Act 1934.
The original choice for the seal of RBI was the East India Company Double Mohur, with the
sketch of the Lion and Palm Tree. However, it was decided to replace the lion with the tiger, the
national animal of India. The Preamble of the RBI describes its basic functions to regulate the
issue of banknotes, keep reserves to secure monetary stability in India, and generally to operate
the currency and credit system in the best interests of the country. The Central Office of the RBI
was established in Calcutta (now Kolkata) but was moved to Bombay (now Mumbai) in 1937.
The RBI also acted as Burma's (now Myanmar) central bank until April 1947 (except during the
years of Japanese occupation (1942–45)), even though Burma seceded from the Indian Union in
1937. After the Partition of India in August 1947, the bank served as the central bank
for Pakistan until June 1948 when the State Bank of Pakistan commenced operations. Though
set up as a shareholders' bank, the RBI has been fully owned by the Government of India since
its nationalisation in 1949.[17] RBI has a monopoly of note issue.

1950–1960[edit]
In the 1950s, the Indian government, under its first Prime Minister Jawaharlal Nehru, developed
a centrally planned economic policy that focused on the agricultural sector. The administration
nationalised commercial banks[18] and established, based on the Banking Companies Act,
1949 (later called the Banking Regulation Act), a central bank regulation as part of the RBI.
Furthermore, the central bank was ordered to support economic plan with loans. [19]

1961–1968[edit]
As a result of bank crashes, the RBI was requested to establish and monitor a deposit insurance
system. Meant to restore the trust in the national bank system, it was initialized on 7 December
1961. The Indian government founded the funds to promote the economy and used the slogan
"Developing Banking". The government of India restructured the national bank market and
nationalized a lot of institutes. As a result, the RBI had to play the central part in controlling and
supporting this public banking sector.

1969–1984[edit]
In 1969, the Indira Gandhi-headed government nationalised 14 major commercial banks. Upon
Indira Gandhi's return to power in 1980, a further six banks were nationalised. [16] The regulation of
the economy and especially the financial sector was reinforced by the Government of India in the
1970s and 1980s.[20] The central bank became the central player and increased its policies a lot
for various tasks like interests, reserve ratio and visible deposits.[21] These measures aimed at
better economic development and had a huge effect on the company policy of the institutes. The
banks lend money in selected sectors, like agricultural business and small trade companies.
[22]
The Banking Commission was established on Wednesday, 29 January 1969, to analyse
banking costs, effects of legislations and banking procedures, including non-banking financial
intermediaries and indigenous banking on Government of India economy; with R.G. Saraiya as
the chairman.[23][24][25]
The branch was forced to establish two new offices in the country for every newly established
office in a town.[26] The oil crises in 1973 resulted in increasing inflation, and the RBI restricted
monetary policy to reduce the effects.[27]

1985–1990[edit]
A lot of committees analysed the Indian economy between 1985 and 1989. Their results had an
effect on the RBI. The Board for Industrial and Financial Reconstruction, the Indira Gandhi
Institute of Development Research and the Security & Exchange Board of India investigated the
national economy as a whole, and the security and exchange board proposed better methods for
more effective markets and the protection of investor interests. The Indian financial market was a
leading example for so-called "financial repression" (Mckinnon and Shaw).[21] The Discount and
Finance House of India began its operations in the monetary market in April 1988; the National
Housing Bank, founded in July 1988, was forced to invest in the property market and a new
financial law improved the versatility of direct deposit by more security measures and
liberalisation.[28]

1991–1999[edit]
The national economy contracted in July 1991 as the Indian rupee was devalued. [29] The currency
lost 18% of its value relative to the US dollar, and the Narsimham Committee advised
restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory
liquidity ratio. New guidelines were published in 1993 to establish a private banking sector. This
turning point was meant to reinforce the market and was often called neo-liberal.[20] The central
bank deregulated bank interests and some sectors of the financial market like the trust and
property markets.[30] This first phase was a success and the central government forced a diversity
liberalisation to diversify owner structures in 1998.[21]
The National Stock Exchange of India took the trade on in June 1994 and the RBI allowed
nationalised banks in July to interact with the capital market to reinforce their capital base. The
central bank founded a subsidiary company—the Bharatiya Reserve Bank Note Mudran Private
Limited—on 3 February 1995 to produce banknotes.[31]

2000 - 2009[edit]
The Foreign Exchange Management Act, 1999 came into force in June 2000. It should improve
the item in 2004–2005 (National Electronic Fund Transfer).[32] The Security Printing & Minting
Corporation of India Ltd., a merger of nine institutions, was founded in 2006 and produces
banknotes and coins.[33]
The national economy's growth rate came down to 5.8% in the last quarter of 2008–2009 [34] and
the central bank promotes the economic development.[35]

Since 2010[edit]
In 2016, the Government of India amended the RBI Act to establish the Monetary Policy
Committee (MPC) to set. This limited the role of the RBI in setting interest rates, as the MPC
membership is evenly divided between members of the RBI (including the RBI governor) and
independent members appointed by the government. However, in the event of a tie, the vote of
the RBI governor is decisive.[7]
In April 2018, the RBI announced that "entities regulated by RBI shall not deal with or provide
services to any individual or business entities dealing with or settling virtual currencies,"
including Bitcoin.[36] While the RBI later clarified that it "has not prohibited" virtual currencies, [37] a
three-judge panel of the Supreme Court of India issued a ruling on 4 March 2020 that the RBI
had failed to show "at least some semblance of any damage suffered by its regulated entities"
through the handling of virtual currencies to justify its decision.[38] The court challenge was filed by
the Internet and Mobile Association of India, whose members include some cryptocurrency
exchanges whose businesses suffered following the RBI's 2018 order.[