Role of RBI



The 'Reserve Bank of India' (RBI) is the central bank of our country. A central bank controls all banks, financial institutions and financial firms in India. So, to explain the role of the RBI, we have a story to share that will give more clarity to your understanding of this module.


Ram had been a curious child since he was a little boy. As he was growing up, he was fascinated by the mechanisms that contributed to the working of a country. He always wondered how the government had so much money to spend for the welfare of the people. He went to the bank with his father regularly. He used to get puzzled by the amount of money there and pondered on how the transactions were taking place. Over time his questions tripled in number and the need for answers grew simultaneously. He sat down with his father one day and was bombarded with multiple questions. His father laughed and said that the first step to understand the financial workings of a country is to know about the Central Bank and its functions. Here’s what he had to say:


Overview of Reserve Bank of India

The Reserve Bank of India was established on April 1, 1935. It was originally a private entity, but its reins were handed over to the Government of India after the nationalization program. The RBI is regarded as India’s central bank and regulatory body under the jurisdiction of the Ministry of Finance.


Every single task that an individual working in the RBI undertakes has an impact on the entire country; the poor as well as the rich get affected by its policies and working. The RBI is a statutory body that performs a number of onerous functions.

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