RBI as Banker of All Banks And its Functions

  • RBI is the central Bank of India and controls the entire money issue, circulation the entire money issue, circulation and control by its monetary policies and lending policies by periodical updates or corrections to discipline the economy.
  • The central bank of India, founded in 1935, which maintains the monetary policy of its national currency, the rupee, and the nation’s currency reserves.
  • It is also known as the Bank of last resort/Banker’s bank/Government’s bank.

RBI as Banker of All Banks And its Functions pdf download


  • The reserve bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • The Central Office of the Reserve Bank of India was initially established in Calcutta but was permanently moved to Mumbai in 1937.
  • Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.

MAIN FUNCTIONS OF RBI:RBI as Banker of All Banks And its Functions

1) Monetary Authority: Formulates implements and monitors the monetary policy.

2) Regulator and supervisor of the financial system: Prescribes broad parameters of banking operations within which the country’s banking and financial system functions.

3) Manager of Foreign Exchange: Manages the Foreign Exchange Management Act, 1999.

4) Issuer of Currency: Issues and exchanges or destroys currency and coins not fit for circulations.

5) Development role:  Performs a wide range of promotional functions to support national objectives.

6) Bankers to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.

7) Bankers to banks: maintains banking accounts of all scheduled banks.

Current Focus- RBI Current Focus is Mainly on these Issues

  • supervision of financial institutions
  • consolidated accounting
  • legal issues in bank frauds
  • divergence in assessments of non-performing assets and
  • supervisory rating model for banks.

Central Board of RBI:RBI as Banker of All Banks And its Functions

  • The Reserve Bank’s affairs are governed by a central board of directors.
  • The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
  • They are appointed/nominated for a period of four years

Official Directors:

Full-time : Governor and not more than four Deputy Governors


  1. Dr. Raghuram Rajan (Governor)
  2. Shri H.R. Khan (Deputy Governor)
  3. Dr. Urjit R. Patel (Deputy Governor)
  4. Shri R. Gandhi (Deputy Governor)
  5. Shri S. S. Mundra (Deputy Governor)

Subsidiaries of RBI:

Fully owned:

  • Deposit Insurance and Credit Guarantee Corporation of India(DICGC)
  • Bharatiya Reserve Bank Note Mudran Private Limited(BRBNMPL).

Legal Framework – Means Various Acts And Laws through which RBI Regulate

Umbrella Acts

  • Reserve Bank of India Act, 1934: governs the Reserve Bank functions
  • Banking Regulation Act, 1949: governs the financial sector

Acts governing specific functions

  • Public Debt Act, 1944/Government Securities Act (Proposed): Governs government debt market
  • Securities Contract (Regulation) Act, 1956: Regulates government securities market
  • Indian Coinage Act, 2011:Governs currency and coins
  • Foreign Exchange Regulation Act, 1973/ Foreign Exchange Management Act, 1999 : Governs trade and foreign exchange market
  • “Payment and Settlement Systems Act, 2007: Provides for regulation and supervision of payment systems in India”
    • Payment and Settlement Systems Regulations, 2008 and Amended up to 2011 and BPSS Regulations, 2008
  • Government Securities Regulations, 2007

Acts governing Banking Operations

  • Companies Act, 1956 and 2013:Governs banks as companies
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980: Relates to nationalisation of banks
  • Bankers” Books Evidence Act
  • Banking Secrecy Act
  • Negotiable Instruments Act, 1881

Other Important facts related to RBI:

  • Reserve Bank of India Act passed in 1934.
  • Reserve Bank of India (RBI) established on 1 April 1935.
  • Reserve Bank of India (RBI) established on the recommendation of Hilton-Young Commission.
  • RBI is the sole authority in India to issue Bank notes in India.
  • Emblem of RBI: Panther and Palm Tree.
  • Chintaman Dwarkanath Deshmukh (C D Deshmukh) was the governor of RBI at the Time of nationalization of RBI in 1949.
  • 1st women Deputy Governor of RBI -K.J.Udeshi.
  • RBI is not expected to perform the function of accepting deposits from the general public
  • The first Governor of the Reserve Bank of India from 01.04.1935 to 30.06.1937 was Sir Osborne Smith
  • RBI decides the following rates namely; Bank rate, repo rate, reverse repo rate and cash reserve ratio.

Important Links

Important Links For Study Material And Test Series 

Follow Us On Facebook – Facebook Page 

The Hindu Daily News Paper Important Articles Pdf 

Join StudyDhaba.Com Telegram Channel – t.me/studydhaba

Latest Current Affairs Magazine 2019 Pdf

UPSC Prelims ,Mains ,Optional Study Materials

UPSC Prelims Test Series 2020 Pdf 

UPSC Mains Test Series 2019-2020 

UPSC Optional Test Series 2019-2020 

SSC Study Materials 2019-2020 Pdf 

IBPS Study Material 2019-2020 Pdf

Insurance Exams Free Study Materials Pdf 2019

NEET Exam Free Study Material Pdf 

Latest RRB Study Material Pdf 

Teaching Exams Study Material Pdf 

EContact US  [email protected] / [email protected]
Note & Disclaimer – All Study Materials Here are shared Only For Educational Purposes .Most of The Material Is Already Available On Internet .We Are Just Sharing That Link Only  . Whole Materials Is For Education Purpose Only .We Work hard to Provide You Quality Study Materials And Error Free Study Materials For All Competitive Exams .You can Also Share Study Materials,Notes Or Any Materials With Us .We Will Publish That Material On Our Website .It is a Humble Request To All Of You Please Share This Post With Your Friends And On Social Media .