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A new milestone at Mint Road

On Thursday, Prime Minister Narendra Modi will be in Mumbai to commemorate the central bank turning 80. Business Standard takes a look at RBI's 80-year journey

Business Standard 

A photo of the first meeting of RBI’s Central Board of Directors, which was held in Calcutta on January 14, 1935

The Reserve Bank of India (RBI), established through the Reserve Bank of India Act, 1934, commenced operations in 1935. Unlike many other central banks, with a sole mandate of inflation targeting, RBI wears many hats - monetary policy authority, supervisor and regulator of the financial system, manager of foreign exchange and issuer of currencies, among others.

On Thursday, Prime Minister Narendra Modi will be in Mumbai to commemorate the central bank turning 80. Business Standard takes a look at RBI's 80-year journey:

THE EIGHT DECADES OF RBI


THE CONCEPT OF A CENTRAL BANK (1925 - 1934)

DECADE 1: THE JOURNEY BEGINS (1935 - 1944)

DECADE 2: THE EARLY YEARS (1945 - 1954)

DECADE 3: BUILDING INSTITUTIONS (1955 - 1964)

DECADE 4: THE ERA OF NATIONALISATION OF (1965 - 1974)

DECADE 5: THE PERIOD OF EXPANSION OF BANKING BUSINESS (1975 - 1984)

DECADE 6: THE PERIOD OF ECONOMIC LIBERALISATION (1985 - 1994)

DECADE 7: THE ERA OF CRISIS AND REFORMS (1995 - 2004)

DECADE 8: CONSOLIDATING THE GAINS AND TACKLING INFLATION (2005 - 2015) GOVERNORS & THEIR TENURES


RBI AND THE LAW

The Reserve Bank of India (RBI) was established on April 1, 1935, in accordance with the provisions of the RBI Act, 1934. However, there are several other Acts that govern the functioning of India's central bank. Here are the Acts governing RBI's various functions.


UMBRELLA ACTS:

  • RBI Act, 1934: It governs the central bank's functions**
  • Banking Regulation Act, 1949: It governs the financial sector.
** Minister Arun Jaitley, in his Budget speech for 2015-16, has proposed to amend this Act to provide for a new committee that will take decisions on monetary policy actions and set interest rates. He also proposed to amend the sections 45U and 45W of the RBI Act, which will effectively take away the central bank's powers to regulate government securities and other money market instruments

ACTS GOVERNING SPECIFIC FUNCTIONS:
  • Public Debt Act, 1944/Government Securities Act (proposed): Governs the government debt market
  • Securities Contract (Regulation) Act, 1956: It regulates the government securities market.
  • Indian Coinage Act, 2011: Governs laws related to currency and coins
  • Foreign Exchange Regulation Act, 1973 / Foreign Exchange Management Act, 1999: Governs foreign exchange market
  • Payment and Settlement Systems Act, 2007: Provides for regulation and supervision of payment systems in India
  • Government Securities Regulations, 2007
ACTS GOVERNING BANKING OPERATIONS:
  • Companies Act, 2013: Governs as companies
  • Banking Companies (Acquisition and Transfer of Undertakings) Act 1970/1980: On nationalisation of banks
  • Bankers' Books Evidence Act
  • Banking Secrecy Act
  • Negotiable Instruments Act, 1881
ACTS GOVERNING INDIVIDUAL INSTITUTIONS:
  • State Bank of India Act, 1954
  • The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003
  • The Industrial Corporation (Transfer of Undertaking and Repeal) Act, 1993
  • National Bank for Agriculture and Rural Development Act
  • National Housing Bank Act
  • Deposit Insurance and Credit Guarantee Corporation Act
Source: RBI

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First Published: Wed, April 01 2015. 21:55 IST
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