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 Reserve Bank of India (RBI) is the central bank of India with regional offices across the country. RBI is governed by a central board of directors headed by a Governor. The current governor of RBI is Dr. Y. Venugopal Reddy who succeeded Dr. Bimal Jalan on September 6, 2003. Apart from governor, the RBI also include four Deputy Governors, one Government official from the Ministry of Finance, ten nominated Directors by the Government to give representation to important elements in the economic life of the country, and four nominated Directors by the Central Government to represent the four local Boards with the
headquarters at Mumbai, Kolkata, Chennai and New Delhi.

The Reserve Bank of India was also instrumental in institutional development and helped to set up institutions like the Deposit Insurance and Credit Guarantee Corporation of India, the Unit Trust of India, the Industrial Development Bank of India, the National Bank of Agriculture and Rural Development, the Discount and Finance House of India etc. to build the financial infrastructure of the country.

Functions of Reserve Bank of India

Issuing of Bank Notes: Under Section 22 of the Reserve Bank of India Act, the RBI is the only national agency in India which has the sole right to issue bank notes of all denominations.

Banker to Government: The Reserve Bank of India acts as a government banker in all the states of India except Jammu and Kashmir.

RBI as Bankers' Bank: The Reserve Bank of India acts as the bankers' bank and every bank in India is required to maintain with the Reserve Bank a cash balance equivalent to 5% of its demand liabilities and 2 per cent of its time liabilities in India according to the provisions of the Banking Companies Act of 1949.

Controller of Credit: The Reserve Bank of India is the controller of credit and has the power to influence the volume of credit created by banks in India. It can do so through changing the Bank rate or through open market operations. The Reserve Bank has also the power to inspect the accounts of any commercial bank. Every bank will have to get the permission of the Reserve Bank before it can open a new branch. Every bank has to get a licence from the Reserve Bank of India to do banking business within India.