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Reserve Bank of India.

Reserve Bank of India was founded on 1st April 1935

in accordance with the Reserve Bank of India Act 1934,

to respond to economic troubles after the First World War.

The central office of the R.B.I.was initially established in Calcutta

but was permanently moved to Mumbai in 1937.

Nationalization of R.B.I.took place in 1949 and from

January 1st, 1949 R.B.I. started working as Government

owned bank.R.B.I.controls the monetary and other

banking policies of the Indian Government. R.B.I.plays

an important role in the development strategy of the

Government of India.Sir Osborne Smith was the first

Governor of R.B.I. while C.D.Deshmukh was the first

Indian R.B.I.Governor.Head quarter of R.B.I. is at Mumbai.

It has 27 departments. These departments frame policies

in their respective work areas. They are headed by Senior

Officers in the rank of chief General Manager.

R.B. I. has 4 zonal offices at Chennai, Delhi, Kolkata and

Mumbai.

Functions of RB1.-1.Maintaining a uniform rate of interest throughout the country.

2.R.B.I.has the sole rights of minting the money and

R.B.I.Governor signs the currency notes apart from

one rupee note.The one rupee note is issued by Ministry

of Finance and it bears the signature of finance secretary.

3.R.B.I.works as a custodian of country’s foreign currency reserve.

4.It manages the supply of money in the Indian economy.

R.B.I.provides financial assistance to commercial banks

and State Co-Operative Banks through re -discounting

of bills of exchange.

5.Central clearance and Accounts settlement.

6.Controller of Credit.

7.Custodian of cash reserves of commercial banks.

Commercial banks pay taxes on their net profit as per

Company’s Act.However R.B.I. is not liable for payment

of any income or wealth tax on its income. After meeting

its expenditures and other obligations it transfers about

99.99% of income to Government of India.

Reserve money is currency in circulation plus deposits

of commercial banks with R.B.I.

Repo rate is the rate at which R.B.I. lends money to

commercial banks in the event of any shortfall of funds.

Source:Collection.

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