IBS/U5 Topic 1 Reserve Bank of India: Objectives
The Reserve Bank of India is the central bank of India. It was formed in the year 1935 on 1st April. It was established that under the reserve bank of India act of 1934. Initially, till 1949 the reserve bank of India was private. After then the bank was nationalized by the government of India. Earlier the headquarters of the RBI was in Calcutta and after the nationalization, it was shifted to Mumbai.
The Reserve Bank of India was established with the main motto of regulating all the banks in India. The objective was to keep in check the reserves as well as the issue of bank notes.
So, it was done to secure the monetary stability and thereby to operate the credit system and currency of the country to its own advantage.
Prior to the RBI, the government of India and the Imperial Bank of India were unable to control the Indian financial system by keeping it in check.
Therefore, a committee led by the Hilton and young commission in 1935, shifted the entire financial system to the RBI.
So, the primary target for RBI was to control and regulate the various financial policies and help in the development of the banking facilities throughout India.
The primary objective for the RBI would be to regulate the various banking functions for India in the money market. Thus, they focus mainly on issuing new notes.
The RBI was established with the aim of being a banker’s bank and also the bank for the government. Its task was to promote the economic growth of the country through various frameworks and economic policies of the government.