The Reserve Bank of India (RBI) was established on April 1 1935 under Reserve Bank of India Act, 1934. It is India's central bank and regulatory body responsible for regulation of Indian Banking system. It is managed under Ministry of Finance, India.

Main Functions:
  • Monetary authority

    • RBI Formulates, implements and monitors the monetary policy.
    • The objective behind this is to maintain price stability while maintaining the growth.

  • Manager of Foreign Exchange

    • Manages the Foreign Exchange Management act, 1999 (FEMA)
    • Faciliates external trade and payment and maintenance of foreign exchange market in the country.

  • Issuer of Currency

    • Issues, exchanges and even destroys currency and as well puts the coins minted by Government of India into Circulation.

Know about RBI Exams : RBI Grade B Exam

TNPSC Previous year Questions:

1. Consider the following statements:

    1. The governor of the RBI is appointed by Central Government.

    2. Certain provisions in the constitution of India give the Central Government the right to issue               directions to the RBI in the public interest.

    3. The Governor of the RBI draws his natural power from the RBI Act.

    Which of the above statements is/are correct?

a. 1 and 2 only

b. 2 and 3 only

c. 1 and 3 only

d. 1,2 and 3


Answer: 1 and 3 only.