Reserve Bank of India

1. RBI (Reserve Bank of India):

• Reserve Bank of India (RBI) is the central bank of the country. RBI is a statutory body. It is responsible for the printing of currency notes and managing the supply of money in the Indian economy. The Reserve Bank of India was founded in 1935,  under RBI Act 1934 on the recommendations of John Hilton Young Commission in 1926 which was also  called Royal Commission on Indian Currency & Finance)
• Reserve Bank of India (RBI) is the highest monetary authority of India. RBI works as a custodian of the foreign reserve, banker’s bank, banker to the government of India, and controller of credit.
• Initially, the ownership of almost all the share capital was in the hands of non-government shareholders. So in order to prevent the centralization of the shares in few hands, the RBI was nationalized on January 1, 1949.
• The Reserve Bank has adopted the Minimum Reserve System for issuing/printing currency notes. Since 1957, it maintains gold and foreign exchange reserves of Rs.200 Cr. of which at least Rs.115 cr. should be in gold and remaining in the foreign currencies. 
• Chintaman Dwarkanath Deshmukh (first Indian governor)
• Osborne Smith (first governor)

Functions of Reserve Bank:
1. Issue of Notes:

• The Reserve Bank has a monopoly for printing the currency notes in the country. It has the sole right to issue currency notes of various denominations except one rupee note (which is issued by the Ministry of Finance).

2. Banker to the Government:

• The second important function of the Reserve Bank is to act as the Banker, Agent, and Adviser to the Government of India and states. It performs all the banking functions of the State and Central Government and it also tenders useful advice to the government on matters related to economic and monetary policy. It also manages the public debt of the government.

3. Banker’s Bank:

• The Reserve Bank performs the same functions for the other commercial banks as the other banks ordinarily perform for their customers. RBI lends money to all the commercial banks of the country.

4. Controller of the Credit:

• The RBI undertakes the responsibility of controlling credit created by commercial banks. RBI uses two methods to control the extra flow of money in the economy. These methods are quantitative and qualitative techniques to control and regulate the credit flow in the country.
• When RBI observes that the economy has sufficient money supply and it may cause an inflationary situation in the country then it squeezes the money supply through its tight monetary policy and vice versa.

5. Custodian of Foreign Reserves:

• For the purpose of keeping the foreign exchange rates stable, the Reserve Bank buys and sells the foreign currencies and also protects the country's foreign exchange funds. RBI sells the foreign currency in the foreign exchange market when its supply decreases in the economy and vice-versa. Currently, India has a Foreign Exchange Reserve of around US$ 440bn (approx).

6. Other Functions:

• The Reserve Bank performs a number of other developmental works. These works include the function of clearinghouse arranging credit for agriculture (which has been transferred to NABARD) collecting and publishing the economic data, buying and selling of Government securities (gilt edge, treasury bills, etc)and trade bills, giving loans to the Government buying and selling of valuable commodities etc. It also acts as the representative of the Government in the International Monetary Fund (I.M.F.) and represents the membership of India.

Official Directors:
Full-time: Governor and not more than four Deputy Governors
Currently: 

• Shaktikanta Das (Governor)
• T. Rabi Sankar ( Deputy Governor)
• M. Rajeshwar Rao ( Deputy Governor)
• Dr. M. D. Patra ( Deputy Governor) 
• M. K. Jain ( Deputy Governor)

Subsidiaries:
There are Four wholly-owned subsidiaries of RBI.
1. Deposit Insurance and Credit Guarantee Corporation (DICGC):

• Establishment: July 15, 1978
• Authorized Capital: Rs.50crore
• Headquarters: Mumbai
• It is a wholly-owned subsidiary of the Reserve Bank of India (RBI). It provides deposit insurance that works as a protection cover for bank deposit holders when the bank fails to pay its depositors.
• DICGC insures all bank deposits, such as saving, fixed, current, recurring deposits for up to the limit of Rs.5,00,000 of each deposit in a bank. (According to Budget 2020-2021)
• The insurance covers principal and interest is now up to a maximum amount of 5 lakh.
• The DICGC does not directly charge any premium from the depositor on this insurance. So Now Banks will pay a premium of 12paise against 10paise per Rs.100 deposit.
• All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.

2. Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL):

• Establishment: February 3, 1995, under the Companies Act 1956
• Headquarters: Bengaluru
• Role: Augmenting the production of banknotes in India to enable the RBI to bridge the gap between the supply and demand for banknotes in the country.
• Printing press: Mysore, Salboni in West Bengal, Nasik, Dewas
• Coin Minting Press: Mumbai, Hyderabad, Calcutta, and Noida

3. Reserve Bank Information Technology Pvt Ltd (ReBIT):

• Establishment: 2016
• Role: To take care of the IT requirements, including the cyber security needs of the Reserve Bank and its regulated entities.

4. Indian Financial Technology & Allied Services (IFTAS):

• Role: Designs, deploys & provides the essential IT-related services, required by the Reserve Bank of India, banks, and financial institutions.
• Sections of RBI:
• Reserve Bank of India Act 1934 is the legislative act under which the Reserve Bank of India was formed.
• There are total 61 sections in the Reserve Bank of India Act 1934.