RBI

The Reserve Bank of India (RBI) is the central bank and monetary authority of India. Established in 1935 under the Reserve Bank of India Act, 1934, it was nationalized in 1949 and operates under the Act and amendments. Headquartered in Mumbai, it serves as the government’s banker and debt manager, regulates the financial system and issues currency in circulation.

The RBI’s primary objectives are price stability and financial system stability, to foster growth. Since 2016, monetary policy has been conducted under a formal inflation-targeting framework, through a six-member Monetary Policy Committee (three RBI officials and three external experts) chaired by the Governor. The Government sets the inflation target, typically 4% with a ±2% band.

The RBI uses instruments such as the repo rate, reverse repo rate, cash reserve ratio (CRR), statutory liquidity ratio (SLR), and open market operations to manage liquidity and influence interest rates. It carries out market operations, regulates banks and financial institutions, and oversees payment systems and settlement frameworks.

It is the sole issuer of banknotes in India and is responsible for currency management, note classification, counterfeiting prevention, and withdrawal of damaged notes. The RBI regulates and supervises banks, non-banking financial companies, and other financial entities to preserve financial stability and integrity.

In addition to domestic duties, the RBI manages the country’s foreign exchange reserves and conducts interventions to support the rupee within the managed float regime. It operates a centralized governance structure, with a governor, deputy governors, a central board, and regional offices, all under the supervision of the Government of India.

The RBI participates in international forums and standard-setting bodies such as the Bank for International Settlements and the IMF, contributing to global financial stability while pursuing national policy objectives.