RBI System
RBI System
Indian financial system. As the custodian of the country’s economic and financial stability, it plays a crucial
role in India’s economic development and smooth functioning of the entire banking sector.
About Reserve Bank of India (RBI)
The Reserve Bank of India, abbreviated as the RBI, is the Central Bank of India, meaning it is
the apex body in the Indian financial system.
It is owned by the Union Ministry of Finance.
It acts as a regulatory body, responsible for the regulation of the Indian banking system as well
as the control, issuing, and maintaining money supply in the Indian economy.
Note: India was the first British colony to have its own Central Bank.
However, later, the Government of India passed the Reserve Bank of India (Transfer to Public Ownership)
Act, 1948. As per its provisions, the ownership of the Reserve Bank of India was transferred from private
entities to the government. This is called the nationalization of the RBI, which transformed it from a privately
owned entity to a fully government-owned entity.
After nationalization in 1949, it emerged as the Central Bank of India and no more remained a ‘bank’ in the
technical sense.
The structure of the Reserve Bank of India (RBI) can be seen as follows: