RBI is an acronym that stands for "Reserve Bank of India." The Reserve Bank of India is the central banking institution of India, and it is responsible for the control and regulation of the country's monetary policy. Established on April 1, 1935, under the Reserve Bank of India Act, the RBI functions as the supreme authority in the Indian banking system.
The primary objective of the RBI is to ensure the stability and integrity of the Indian financial system. It is entrusted with the task of issuing and managing the Indian currency, the Indian Rupee (INR). The RBI formulates and implements monetary policies to maintain price stability, manage inflation, and promote economic growth.
Apart from monetary policy, the RBI also supervises and regulates the functioning of Indian banks and financial institutions. It monitors and controls foreign exchange transactions, manages the foreign exchange reserves of the country, and acts as the banker to both the central and state governments.
Furthermore, the RBI plays a crucial role in ensuring the smooth functioning of the payment and settlement systems within the country. It formulates and enforces regulations related to banking operations, promotes financial inclusion, and acts as a lender of last resort to banks.
Overall, the RBI acts as the custodian of the Indian economy, safeguarding its financial stability and ensuring the efficient and orderly functioning of the banking and monetary system.
