Established under the RBI Act of 1935 and nationalized in 1949, the Reserve Bank of India (RBI) is India’s central bank and regulatory body, and is responsible for the issue and supply of the Indian rupee, and the regulation of the Indian banking system.
Headed by a Governor, it strives for economic development and manages the main payment systems in the country. To know more about the past and present RBI Governors, find the list of RBI Governors in the linked article.
This article will give brief details about the powers, and responsibilities of the RBI Governor as well as the facts about the Reserve Bank of India.
The powers of RBI Governors are as follows:
The RBI Governors have many powers. We can understand them with the help of the following points:
● The RBI Governor heads all commercial banks.
● They can influence the micro and macroeconomic policies of the country.
● The RBI Governor has some amount of control over the stock market.
The responsibilities of the RBI Governor are as follows:
● The RBI Governor is responsible for ensuring monetary stability in an economy.
● By extension, the RBI governor also plays a role in creating the policies of the Reserve Bank of India.
● The RBI Governor decides on issuing licenses to open new foreign and private banks.
● The RBI Governor is responsible for regulating and administering the financial system, and setting the parameters with which it functions.
● RBI Governors have the additional responsibility of managing external trade, promoting orderly development, and maintenance of foreign exchange reserves
● Overseeing the adequate amount of currency notes and coins supply in the country as well as issuing it, and destroying those currency notes, which cannot be circulated among the populace.
● Two of the four Deputy Governors are traditionally from RBI ranks and are selected from the bank’s Executive Directors.
● The main objective of the RBI is to consolidate the financial sector or at least supervise it in that regard. The sector consists of banking as well as non-banking finance institutions.
● The Reserve Bank of India works as a central bank where commercial banks hold accounts. In essence, it is a banker’s bank.
● In order to detect and mitigate counterfeit money, the RBI has launched a website to educate the masses about how to spot fake banknotes. It contains all the details of spotting fake banknotes.
● The central bank has to perform a wide range of promotional functions to support national objectives and industries.
● The Reserve Bank of India is a member of the Asian Clearing Union. It is also a leading member of the Alliance for Financial Inclusion (AFI).
● The overall direction of the RBI lies with the 21-member Central Board of Directors. Until the Monetary Policy Committee was created in 2016, the RBI was in charge of the monetary policy of India.
To know more about the RBI Exam, be sure to visit the linked article.