Reserve Bank of India


India’s Central Bank is known as the Reserve Bank of India and currently resides in Mubai as opposed to its original home of Calcutta. The bank was established in 1935 and like most central banks its main focus is to maintain the monetary stability of country.

The reserve bank is the official issuer of Rupee currency in India and is responsible for making available an adequate supply of good quality currency to the public as well as taking in and destroying coins or notes that are not up to standards due to age or wear. The following are in frequent use: 10, 20, 50, 100, 500, 1000 rupee bank notes and 5, 10, 20, 25, 50 paise coins in a subdivision of 100.

In order to maintain its objective of maintaining price stability and ensuring adequate flow of credit the bank uses monetary policy, more specifically Bank Rate, Repo Rate/Reverse Repo Rate and a Cash Reserve Ratio. For years they have generally been trying to decrease the inflation rate.

It is the Reserve Bank of India’s responsibility to regulate and supervise the whole financial system of the country and they aim to maintain public confidence in the system by providing a cost effective banking service to the public. They have set up the Banking Ombudsman Scheme to address complaints by bank customers.

Their foreign exchange policy is to “facilitate external trade and payment and promote orderly development and maintenance of the foreign exchange market in India,” and they are governed by the Foreign Exchange Management Act, 1999. India has the 4th highest amount of foreign exchange reserves in the world, totaling around $297 Billion.

A lot of regulation in regards to domestic banks and finance companies is supervised by the Board for Financial Supervision. Their functions include:

• restructuring of the system of bank inspections
• introduction of off-site surveillance,
• strengthening of the role of statutory auditors and
• Strengthening of the internal defenses of supervised institutions.


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