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 The first banks were The General Bank of India
which started in 1786, and the Bank of
Hindustan, both of which are now defunct.

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 In 1948, the Reserve Bank of India, India's central

banking authority, was nationalized, and it
became an institution owned by the Government
of India.
 In 1949, the Banking Regulation Act was enacted
which empowered the Reserve Bank of India (RBI)
"to regulate, control, and inspect the banks in
India."
 The Banking Regulation Act also provided that no
new bank or branch of an existing bank could be
opened without a license from the RBI, and no two
banks could have common directors.
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 By the 1960s, the Indian banking industry has
become an important tool to facilitate the
development of the Indian economy. At the same
time, it has emerged as a large employer, and a
debate has ensued about the possibility to
nationalise the banking industry. Indira Gandhi,
the-then Prime Minister of India expressed the
intention of the GOI in the annual conference of
the All India Congress Meeting in a paper entitled
"Stray thoughts on Bank Nationalisation."
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 A 

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, or 
   is
the entity responsible for the monetary policy of a country
or of a group of member states.
 Its primary responsibility is to maintain the stability of the
national currency and money supply, but more active
duties include controlling subsidized-loan interest rates,
and acting as a lender of last resort to the banking sector
during times of financial crisis .
 Most richer countries today have an "independent" central
bank, that is, one which operates under rules designed to
prevent political interference.


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’
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 Australia Ȃ Reserve Bank of Australia
 Brazil Ȃ Central Bank of Brazil
 Egypt Ȃ Central Bank of Egypt
 Sweden Ȃ Bank of Sweden
 India Ȃ Reserve Bank of India
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 The 


  (RBI, Hindi:

ÎÎÎÎÎÎÎÎÎÎÎÎÎÎÎÎÎ) is the central
bank of India, and was established on April 1, 1935
in accordance with the provisions of the Reserve
Bank of India Act, 1934.
 The Central Office of the Reserve Bank was
initially established in Kolkata but was
permanently moved to Mumbai in 1937.
 The Reserve Bank of India was set up on the
recommendations of the Ô
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 The Bank began its operations by taking over
from the Government the functions so far being
performed by the Controller of Currency and
from the Imperial Bank of India, the
management of Government accounts and
public debt.
 An interesting feature of the Reserve Bank of
India was that at its very inception, the Bank
was seen as playing a special role in the
context of development, especially Agriculture.
 ^’ m’
 The Preamble of the Reserve Bank of India describes the
basic functions of the Reserve Bank as:
 "...to regulate the issue of Bank Notes and keeping of
reserves with a view to securing monetary stability in India
and generally to operate the currency and credit system of
the country to its advantage."
 m’’
 Primary objective of RBI is to undertake
consolidated supervision of the financial sector
comprising commercial banks, financial
institutions and non-banking finance
companies.
 


 The Board is constituted by co-opting four
Directors from the Central Board as members for a
term of four years and is chaired by the Governor.
The Deputy Governors of the Reserve Bank are ex-
officio members. One Deputy Governor, usually,
the Deputy Governor
in charge of banking
regulation and supervision,
is nominated as the
Vice-Chairman of the Board.


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The Reserve Bank of India Act of 1934 entrust all the important functions of a
central bank the Reserve Bank of India.
 

‘nder Section 22 of the Reserve Bank of India Act, the Bank
has the sole right to issue bank notes of all denominations.
The distribution of one rupee notes and coins and small coins
all over the country is undertaken by the Government.
 
 


The second important function of the Reserve Bank of India is
to act as Government banker, agent and adviser. The Reserve
Bank is agent of Central Government and of all State
Governments in India excepting that of Jammu and Kashmir.

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(

The Reserve Bank of India acts as the bankers'
bank. According to the provisions of the Banking
Companies Act of 1949, every scheduled bank was
required to maintain with the Reserve Bank a cash
balance equivalent to 5% of its demand liabilites
and 2 per cent of its time liabilities in India.
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The Reserve Bank of India is the controller of credit
i.e. it 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.
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The Reserve Bank of India has the responsibility

to maintain the official rate of exchange.
According to the Reserve Bank of India Act of
1934, the Bank was required to buy and sell at
fixed rates any amount of sterling in lots of not
less than Rs. 10,000.
 ’ ’ ’ 


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’
 ratermark :The Mahatma Gandhi Series of banknotes
contain the Mahatma Gandhi watermark with a light and
shade effect and multi-directional lines in the watermark
window.
 Latent Image:On the obverse side of Rs.1000, Rs.500, Rs.100,
Rs.50 and Rs.20 notes, a vertical band on the right side of the
Mahatma Gandhiǯs portrait contains a latent image showing
the respective denominational value in numeral. The latent
image is visible only when the note is held horizontally at eye
level.
 Intaglio:The portrait of Mahatma Gandhi, the Reserve Bank
seal, guarantee and promise clause, Ashoka Pillar Emblem on
the left, RBI Governor's signature are printed in intaglio i.e. in
raised prints, which can be felt by touch, in Rs.20, Rs.50,
Rs.100, Rs.500 and Rs.1000 notes.
Àluorescence: Number panels of the notes are printed in
fluorescent ink. The notes also have optical fibres. Both can be
seen when the notes are exposed to ultra-violet lamp.

Security Thread:Rs.1000 notes introduced in October 2000

contain a readable, windowed security thread alternately
visible on the obverse with the inscriptions ǮBharatǯ (in Hindi),
Ǯ1000ǯ and ǮRBIǯ, but totally embedded on the reverse.

Microlettering:This feature appears between the vertical band

and Mahatma Gandhi portrait. It contains the word ǮRBIǯ in
Rs.5 and Rs.10. The notes of Rs.20 and above also contain the
denominational value of the notes in microletters. This feature
can be seen better under a magnifying glass.
Identification Mark: special feature in intaglio has been
introduced on the left of the watermark window on all notes
except Rs.10/- note. This feature is in different shapes for
various denominations and helps the visually impaired to
identify the denomination.

Optically Variable Ink: This is a new security feature

incorporated in the Rs.1000 and Rs.500 notes with revised
colour scheme introduced in November 2000.

Legal provisions against counterfeiting: Printing and

circulation of forged notes are offences under Sections 489A to
489E of the Indian Penal Code and are punishable in the courts
of law by fine or imprisonment or both.
^ 
^   ’

Report of G20 rorking Group on Enhancing Sound Regulation
and Strengthening Transparency
 April 6, 2009
CÀSA Reports Released : Àinancial Sector Self Assessment
finds System Broadly Robust but Identifies Specific
Concerns
 March 30, 2009
CGÀS Report on Capital Àlows and Emerging Market
Economies released
 Àebruary 3, 2009
RBI Discussion Paper on Holding Companies in Banking
Groups
 August 27, 2007
 Master Circular on External Commercial
Borrowings and Trade Credits
July 2, 2007
Comprehensive Guidelines on Derivatives
April 20, 2007
Branch Licensing Policy for Regional Rural
Banks
June 13, 2006
Authorised Persons - Categorisation
March 6, 2006
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