The Reserve Bank of India (RBI) opened for business on 1 April 1935, and almost every big change in Indian banking since then has passed through it. Knowing its history helps you explain why the RBI does what it does today, and the dates come up again and again in exams. This first part of the series follows the RBI from a 1926 recommendation to the Monetary Policy Committee, UPI and the digital rupee.
In the news
The RBI's history is still being written. These recent developments link the story below to current affairs, newest first.
- 14 Oct 2026: Cabinet clears the sale of IDBI Bank to Fairfax. The Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake held by the government and LIC to a Fairfax Financial Holdings entity for about ₹52,878 crore; the deal still needs the RBI's "fit and proper" approval (details in the IDBI section below). Why it matters for the exam: IDBI began in 1964 as an RBI subsidiary, so its sale closes a loop that runs through the RBI's institution-building era.
- 29 May 2026: Annual Report shows e-rupee pilots spreading to subsidies and markets. The RBI's Annual Report 2025-26 says programmable e-rupee was used to deliver public distribution system subsidies in Gujarat, Puducherry and Chandigarh, a tokenised certificate-of-deposit pilot settled in wholesale CBDC, and cross-border CBDC pilots are planned after talks with Singapore's MAS and the UAE central bank. Retail e-rupee in circulation was ₹771.66 crore at end-March 2026, down from ₹1,016.50 crore a year earlier. Why it matters for the exam: the e-rupee is the latest step in the RBI's currency-issuing role, which goes back to the Preamble of the 1934 Act.
- 22 May 2026: Record surplus transfer of ₹2,86,588.46 crore. The RBI's Central Board, at its 623rd meeting chaired by Governor Sanjay Malhotra, approved this surplus transfer to the Central Government for 2025-26, while keeping the Contingent Risk Buffer at 6.5% of the balance sheet. The previous record was ₹2,68,590.07 crore for 2024-25, approved on 23 May 2025. Why it matters for the exam: the RBI pays its surplus to the government because it has been wholly government-owned since nationalisation on 1 January 1949.
- 4 May 2026: Rohit Jain becomes Deputy Governor. Rohit Jain, until then an Executive Director, took charge as Deputy Governor for three years in place of T. Rabi Sankar, and the RBI reallocated portfolios among its four Deputy Governors. On 5 June 2026 the government also re-appointed Swaminathan J. as Deputy Governor for two years from 26 June 2026. Why it matters for the exam: Deputy Governors are appointed by the Central Government under Section 8 of the RBI Act, 1934, which allows up to four.
- 25 Mar 2026: Inflation target renewed to 2031. The government, in consultation with the RBI, notified the 4% CPI inflation target (band 2–6%) for 1 April 2026 to 31 March 2031 under Section 45ZA of the RBI Act. Why it matters for the exam: this is the third five-year period of the inflation-targeting framework that began with the 2016 amendment.
- 1 Nov 2025: New nomination rules under the Banking Laws (Amendment) Act, 2025. The nomination provisions of this Act came into force, letting depositors name up to four nominees, simultaneously or successively. The Act, notified in April 2025, amends the RBI Act, 1934, the Banking Regulation Act, 1949, the SBI Act, 1955 and the two bank nationalisation Acts of 1970 and 1980; an earlier batch of provisions took effect on 1 August 2025. Why it matters for the exam: it is the latest amendment to the two laws this article tells you not to confuse, the RBI Act, 1934 and the Banking Regulation Act, 1949.
- 9 Oct 2025: Shirish Chandra Murmu takes charge as Deputy Governor. Murmu, an RBI Executive Director, became Deputy Governor for three years, succeeding M. Rajeshwar Rao. Why it matters for the exam: questions on the current top management (the Governor and four Deputy Governors) are common in banking exams.
- 1 Apr 2025: RBI@90 celebrations conclude. The RBI completed 90 years with a commemoration function in Mumbai attended by the President of India, closing a year of events that began on 1 April 2024, when the Prime Minister released a ₹90 commemorative coin. Why it matters for the exam: it ties back to the RBI's start of operations on 1 April 1935, and the RBI has now entered its centenary decade.
Why India needed a central bank
Before 1935 India had no single authority in charge of money and banking. The Government of India issued currency notes itself, and the Imperial Bank of India, a large commercial bank, did some of the government's banking. Nobody had clear responsibility for the supply of money and credit, for the exchange value of the rupee, or for the health of the banking system as a whole.
That gap mattered. Banks failed from time to time, credit was scarce in many regions, and in a crisis there was no lender of last resort. Around the world, more and more countries were setting up central banks after the First World War. The real question for India was what kind of central bank to have and who would control it.
The Hilton Young Commission, 1926
The answer began with the Royal Commission on Indian Currency, usually called the Hilton Young Commission after its chairman, Edward Hilton Young. In 1926 it recommended setting up a central bank to be called the "Reserve Bank of India". Its wider brief covered the stability of the rupee and its exchange rate with sterling, and it argued that currency and credit should be managed by one body instead of being split between the government and the Imperial Bank.
The recommendation did not become law straight away. In 1931 the Indian Central Banking Enquiry Committee took up the case for a Reserve Bank again, and a bill finally went through in 1934.
The RBI Act, 1934 and the start in 1935
The Reserve Bank of India Act, 1934 (Act II of 1934) is the statutory basis of the Bank. RBI's own chronology dates it to 5 March 1934. The Bank began operations on 1 April 1935, and Sir Osborne Smith was its first Governor.
Three features of the 1934 design are worth remembering:
- A shareholders' bank. The RBI started as a privately owned institution. Section 4 of the Act set its capital at ₹5 crore, and private shareholders held that capital until 1949.
- The Preamble. It sets out the Bank's basic job: "to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India" and to operate the currency and credit system to the country's advantage. In 2016 Parliament added a line about the need for a "modern monetary policy framework" (more on that below).
- Cash reserves from day one. From 5 July 1935, scheduled banks had to hold cash reserves with the RBI. This is the origin of today's Cash Reserve Ratio (CRR).
Early tools and duties
In its first few years the RBI set up a London office (October 1935) and issued its first banknotes (January 1938). It also took on the role of banker to the government, managed public debt, and came to supervise commercial banks. Exchange controls began on 3 September 1939 under the Defence of India Rules, at the outbreak of the Second World War. The RBI ran them, which was the start of its long role in foreign exchange.
The early years: from Calcutta to Bombay, Burma and Partition
The headquarters move
The RBI's Central Office was first set up in Calcutta (now Kolkata). In 1937 it moved permanently to Bombay (now Mumbai), where the Governor sits and policy is made to this day.
Central bank for Burma
Burma (now Myanmar) was separated from British India in 1937, but the RBI went on acting as banker to the Government of Burma and managing its note issue. The arrangement was interrupted by the Japanese occupation during the Second World War. In June 1945 the RBI took on currency and banking duties for the British Military Administration of Burma, and its role there ended in April 1947.
Central bank for Pakistan
After Partition in August 1947, the RBI also served as Pakistan's central bank for a time. That ended on 30 June 1948, and the State Bank of Pakistan opened the next day, 1 July 1948. So for a short period one central bank served three countries.
Wartime and first Indian Governor
Sir C. D. Deshmukh became Governor on 11 August 1943. He was the first Indian to lead the Bank. During his term the RBI introduced a security thread on notes (1944), and in January 1946 the government demonetised ₹500, ₹1,000 and ₹10,000 notes.
Nationalisation in 1949 and the Banking Regulation Act
The RBI becomes state-owned
Independent India wanted its central bank to serve national economic goals, not private shareholders. The Reserve Bank (Transfer to Public Ownership) Act, 1948 transferred all RBI shares to the Central Government, and the RBI was nationalised with effect from 1 January 1949. Shareholders received compensation fixed by the Act (₹118 and 10 annas per share, paid in government promissory notes). Since then the RBI has been fully owned by the Government of India.
A law for banks: 16 March 1949
A frequent exam trap is to confuse the RBI's own law with the law for banks:
- The RBI Act, 1934 governs the RBI itself: its capital, Board, functions and monetary policy powers.
- The Banking Companies Act, 1949 came into force on 16 March 1949 and gave the RBI wide powers to license, inspect and regulate commercial banks. It was renamed the Banking Regulation Act from March 1966. The Statutory Liquidity Ratio (SLR) also dates from 1949.
Also from 1 March 1966, after an amending law, co-operative banks were brought under RBI regulation for the first time.
Sir Benegal Rama Rau took over as Governor on 1 July 1949. In September 1949 the rupee was devalued by 30.5%, following sterling.
Planning era: the RBI as institution-builder
Once India began Five-Year Plans in 1951, the RBI was expected to be more than a monetary authority. It had to help create credit for farmers, industry and savers, which the market was not delivering. This developmental role set India's central bank apart from many others.
Key steps in the 1950s
- 1951–54: The All-India Rural Credit Survey Committee (report August 1954) found that rural credit was badly short.
- 1 July 1955: Acting partly on that report, the government converted the Imperial Bank of India into the State Bank of India (SBI). The RBI was SBI's majority owner for decades, until its 59.73% stake was transferred to the government in 2007.
- 1956–57: The RBI used selective credit controls for the first time (May 1956) and moved the note issue from a proportional reserve system to a minimum reserve system (October 1956).
Institutions the RBI set up or helped build
The RBI built specialised bodies, often as its own subsidiaries, and later handed many of them over to the government:
| Institution | Started | Link with RBI |
|---|---|---|
| Deposit Insurance Corporation | 1 January 1962 | Set up after bank failures in 1960. It merged with the Credit Guarantee Corporation of India (set up 1971) to form the DICGC with effect from 15 July 1978. The DICGC is still a wholly owned RBI subsidiary. |
| Agricultural Refinance Corporation | 1 July 1963 | Renamed Agricultural Refinance and Development Corporation (ARDC) in 1975. Its refinance work passed to NABARD in 1982. |
| Unit Trust of India (UTI) | Set up under the UTI Act, 1963; began 1964 | Set up by the RBI and under its control until 1978, when control passed to IDBI. |
| Industrial Development Bank of India (IDBI) | 1 July 1964 | Began as an RBI subsidiary; ownership passed to the government in February 1976. |
| NABARD | 12 July 1982 | Took over the RBI's agricultural credit functions and ARDC's refinance work. It is now fully owned by the Government of India. |
| National Housing Bank (NHB) | July 1988 | Wholly owned by the RBI until the government bought the stake (effective 2019). |
| Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) | 3 February 1995 | Wholly owned RBI subsidiary that prints banknotes at Mysuru and Salboni. |
The pattern is worth noticing. Over time the government took over the RBI's stakes in SBI, IDBI, NABARD and NHB, mainly so that the regulator would not also own the institutions it regulates. The Narasimham Committee recommended this separation.
IDBI since then, and in the news
IDBI's story did not stop in 1976, and its recent history is a favourite of exam setters:
- 2004, a bank: the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 repealed the IDBI Act, 1964. IDBI's undertaking passed to a new company, Industrial Development Bank of India Ltd, with effect from 1 October 2004, and it began working as a banking company under the Banking Regulation Act. Today it is IDBI Bank Ltd.
- 2019, LIC takes control: the Life Insurance Corporation acquired a controlling 51% stake, and the RBI categorised IDBI Bank as a private sector bank for regulatory purposes with effect from 21 January 2019.
- October 2026, sale to Fairfax: on 14 October 2026 the Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake (30.48% from the government and 30.24% from LIC) to an entity of Canada's Fairfax Financial Holdings, at ₹81 a share, about ₹52,878 crore. After the sale the government is to keep 15% and LIC 19%. The buyer still needs the RBI's "fit and proper" approval and other regulatory clearances, so check the latest status before your exam.
Rural banking and credit planning
The 1960s also brought the first push for wider branch networks. A new licensing policy in May 1962 favoured unbanked areas. In 1962 the Banking Regulation Act was amended to require minimum liquid assets (SLR) of 25%, and the CRR was set at 3% with power to vary it between 3% and 15%. In 1966 the rupee was devalued by 36.5%.
Bank nationalisation, 1969 and 1980
Social control, then nationalisation
By the late 1960s, the government felt that private banks were lending mostly to large industry and trade, not to agriculture and small borrowers. Social control over banks was introduced in December 1967, and a National Credit Council was set up on 22 December 1967 to guide how credit was shared out.
On 19 July 1969, 14 major commercial banks were nationalised. The Supreme Court struck down the 1969 law on 10 February 1970, and a fresh ordinance followed on 14 February 1970. On 15 April 1980, six more private banks were nationalised.
The RBI's role in the new system
The government took the nationalisation decisions, but the RBI turned them into practice. It did this through:
- the Lead Bank Scheme (December 1969), which gave each district a lead bank responsible for coordinating credit;
- priority-sector lending and credit planning, which pushed banks towards agriculture, small industry and weaker sections;
- Regional Rural Banks, set up from 26 September 1975;
- tighter credit controls during the oil shock of 1973, and higher CRR and SLR in the 1970s and 1980s.
By mid-1985, CRR and SLR together pre-empted more than 45% of banks' resources. By July 1989 the figure was over 53%. Much of the money banks raised was locked up in reserves and government bonds, a problem the 1991 reforms set out to fix.
Seeds of change in the 1980s
The Sukhamoy Chakravarty Committee (set up 1985) reviewed the monetary system. New money-market instruments followed: the 182-day Treasury Bill (1986), the Discount and Finance House of India (1988), and Certificates of Deposit and Commercial Paper (1989). The National Housing Bank was set up in 1988, and the cap on bank lending rates was abolished in October 1988.
The 1991 crisis and the reform years
The crisis
By 1991 India faced a severe balance of payments crisis. RBI data show foreign exchange reserves of only about US$5.8 billion at end-March 1991, and they kept falling over the following months. To raise emergency funds, the RBI pledged 46.91 tonnes of gold with the Bank of England and the Bank of Japan in July 1991, raising about US$405 million. That loan was repaid later in 1991. The rupee was devalued in two steps, on 1 and 3 July 1991, by about 18% in all against the US dollar.
The reforms that followed
The crisis led to sweeping changes in how the RBI and the banks worked:
- Narasimham Committee (November 1991): proposed phased cuts in SLR and CRR, more freedom for banks, and stronger supervision.
- Prudential norms (April 1992): rules on income recognition, asset classification, provisioning and capital adequacy, the start of modern bad-loan accounting in India.
- Exchange rate: a dual exchange rate system (LERMS) in March 1992, then a unified, market-determined rate in 1993. In August 1994 the rupee became convertible on the current account.
- New private banks: guidelines for new private sector banks were issued in 1993.
- Interest rates: commercial bank lending rates were deregulated in October 1994.
- Banking Ombudsman: the office was set up in June 1995 to handle customer complaints.
- End of automatic monetisation: from 1 April 1997, ad hoc Treasury Bills were replaced by Ways and Means Advances. The government could no longer finance its deficit automatically by issuing ad hoc bills to the RBI.
- FEMA: the Foreign Exchange Management Act, 1999 replaced FERA, 1973 and came into operation in June 2000. It treats foreign exchange as something to manage, not to police.
The RBI also launched its website on 17 September 1996 and introduced an interim Liquidity Adjustment Facility in April 1999. That facility is the forerunner of today's repo-based operations.
The 21st century: from fiscal rules to the e-rupee
Fiscal discipline and the FRBM Act
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 set limits on government borrowing. Under it, the RBI stopped subscribing to primary issues of central government securities from 1 April 2006. It can still buy and sell government bonds in the secondary market, through open market operations.
Payments get their own law
The Payment and Settlement Systems (PSS) Act, 2007 received assent on 20 December 2007 and came into force on 12 August 2008. It gave the RBI clear legal power to regulate and supervise payment systems. The RBI first did this through a Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). Under regulations in force from 20 May 2025, the job now belongs to a Payments Regulatory Board.
On 11 April 2016, Governor Raghuram Rajan launched the pilot of the Unified Payments Interface (UPI), run by NPCI, with 21 member banks. UPI has since become the backbone of India's digital payments.
Inflation targeting and the MPC
This is the most important modern change in the RBI's monetary policy:
- Urjit Patel Committee (report on 21 January 2014): recommended CPI inflation as the nominal anchor, a target of 4% with a band of ±2%, and a monetary policy committee.
- Monetary Policy Framework Agreement (20 February 2015): signed by the government and the RBI, making price stability the main goal.
- Finance Act, 2016: amended the RBI Act to give flexible inflation targeting a legal basis (new Chapter IIIF, Sections 45Z onwards). The amended Preamble says the primary objective of monetary policy is price stability while keeping growth in mind.
- Monetary Policy Committee (MPC): constituted by government notification on 29 September 2016. It has six members: three from the RBI, including the Governor as chair, and three external members appointed by the Central Government. It first met in October 2016.
- Target renewals: the 4% (±2%) CPI target was retained for 2021–26, and on 25 March 2026 it was notified again for 1 April 2026 to 31 March 2031.
Part 2 of this series covers how the MPC works and what the RBI does day to day.
Demonetisation, 2016
On 8 November 2016, a Government of India notification withdrew the legal tender status of the old ₹500 and ₹1,000 notes. The RBI and banks ran the exchange and deposit of these notes over the following weeks.
Hiving off ownership
Following the principle that a regulator should not own the banks it regulates, the government took over the RBI's stake in SBI in 2007, most of its stake in NABARD in 2010 (the rest by 2019), and all of NHB in 2019.
The digital rupee
The RBI launched pilots of India's central bank digital currency (CBDC), the e-rupee (e₹):
- Wholesale (e₹-W): from 1 November 2022, used to settle secondary-market trades in government securities;
- Retail (e₹-R): from 1 December 2022, in a closed user group of customers and merchants.
Both are still pilots. In 2025-26 the RBI used the e-rupee's programmability to deliver food subsidies, ran a tokenised certificate-of-deposit pilot settled in wholesale CBDC, and began preparing cross-border CBDC pilots with Singapore and the UAE. Take-up is still modest: retail e-rupee in circulation was ₹771.66 crore at end-March 2026.
Who leads the RBI now
Sanjay Malhotra took over as the 26th Governor on 11 December 2024, for three years, succeeding Shaktikanta Das. As of 24 October 2026 he is still Governor, and his term runs to December 2027. His four Deputy Governors are Swaminathan J. (re-appointed from 26 June 2026), Poonam Gupta (since April 2025), Shirish Chandra Murmu (since 9 October 2025) and Rohit Jain (since May 2026). On 7 October 2026 the MPC under his chairmanship raised the repo rate by 25 basis points to 5.50%.
Key facts at a glance
| Recommended by | Hilton Young Commission (Royal Commission on Indian Currency), 1926 |
| Governing law | Reserve Bank of India Act, 1934 (Act II of 1934) |
| Began operations | 1 April 1935 |
| First Governor | Sir Osborne Smith (1935–37) |
| First Indian Governor | Sir C. D. Deshmukh (from 11 August 1943) |
| Original capital | ₹5 crore, privately held until 1949 |
| First Central Office | Calcutta; moved permanently to Bombay (Mumbai) in 1937 |
| Central bank for Burma | Until April 1947 (with a wartime break) |
| Central bank for Pakistan | Until 30 June 1948 |
| Nationalised | 1 January 1949, under the Reserve Bank (Transfer to Public Ownership) Act, 1948 |
| Banking law | Banking Companies Act, 1949 (in force 16 March 1949); renamed Banking Regulation Act from March 1966 |
| Bank nationalisation | 14 banks on 19 July 1969; 6 banks on 15 April 1980 |
| 1991 devaluation | 1 and 3 July 1991, about 18% in all |
| Ad hoc T-bills ended | 1 April 1997 (replaced by Ways and Means Advances) |
| FEMA | Enacted 1999, operative June 2000 |
| PSS Act, 2007 | In force 12 August 2008 |
| Inflation target | 4% CPI, band 2–6%; current period 1 April 2026 to 31 March 2031 |
| MPC | Constituted 29 September 2016; six members |
| e-rupee pilots | Wholesale 1 November 2022; retail 1 December 2022 |
| Governor (24 October 2026) | Sanjay Malhotra, 26th Governor, since 11 December 2024 |
| Deputy Governors (24 October 2026) | Swaminathan J., Poonam Gupta, Shirish Chandra Murmu, Rohit Jain |
| 90 years completed | 1 April 2025 (RBI@90 celebrations, April 2024 to April 2025) |
| Latest surplus transfer | ₹2,86,588.46 crore for 2025-26 (approved 22 May 2026), a record |
Governors who shaped the RBI
The RBI's official list has 26 Governors, including a few who held charge for only weeks or months between full-term appointments.
- Sir Osborne Smith (1935–37): the first Governor. He set up the Bank but resigned before his term ended.
- Sir C. D. Deshmukh (1943–49): the first Indian Governor. He led the RBI through the Second World War and Partition, and up to nationalisation in 1949. He later became Union Finance Minister.
- Sir Benegal Rama Rau (1949–57): the longest-serving Governor, at about seven and a half years. His term covered the early Plans and the creation of SBI in 1955.
- Dr Manmohan Singh (1982–85): the only RBI Governor who later became Prime Minister. As Finance Minister in 1991, he led the reforms described above.
- Dr C. Rangarajan (1992–97): guided the post-crisis reforms. On his watch the rupee moved to a market-based rate, became convertible on the current account, and the automatic monetisation of deficits ended (1997).
- Dr Raghuram Rajan (2013–16): led the move to inflation targeting (the 2015 agreement) and launched the UPI pilot in 2016.
- Dr Urjit Patel (2016–18): chaired the 2014 committee that designed inflation targeting, and became the first Governor to chair the MPC. He resigned in December 2018.
- Shaktikanta Das (2018–24): steered the RBI through the COVID-19 period and launched the e-rupee pilots. He served six years.
- Sanjay Malhotra (11 December 2024 onwards): the current Governor and the 26th in the RBI's list. He was earlier Revenue Secretary in the Finance Ministry.
Exam corner: what to remember
- 1926 Hilton Young Commission → 1934 RBI Act (Act II of 1934) → 1 April 1935 operations begin.
- HQ: Calcutta (1935) → Bombay (1937), permanent.
- RBI was a shareholders' bank (capital ₹5 crore) until nationalisation on 1 January 1949.
- Banking Companies Act, 1949 (16 March 1949) → renamed Banking Regulation Act in 1966. Do not mix it up with the RBI Act, 1934.
- First Governor: Osborne Smith. First Indian Governor: C. D. Deshmukh. Longest-serving: Benegal Rama Rau. Later PM: Manmohan Singh.
- RBI served Burma until April 1947 and Pakistan until 30 June 1948.
- SBI came from the Imperial Bank on 1 July 1955.
- Spun-off or nurtured institutions: DICGC (1978; still an RBI subsidiary), UTI (1964), IDBI (1964), NABARD (12 July 1982), NHB (1988).
- IDBI Bank today: a bank since 1 October 2004; LIC-controlled and categorised as a private sector bank from 21 January 2019; sale of 60.72% to Fairfax approved by the CCEA on 14 October 2026 (pending RBI approval).
- Bank nationalisation: 14 banks (19 July 1969) and 6 banks (15 April 1980).
- 1991: reserves about US$5.8 billion at end-March 1991; gold pledged; rupee devalued 1 and 3 July 1991; Narasimham Committee (Nov 1991).
- 1 April 1997: ad hoc T-bills replaced by Ways and Means Advances.
- FRBM Act 2003: no RBI subscription to primary G-sec issues from 1 April 2006.
- PSS Act 2007 (in force 12 August 2008); UPI pilot 11 April 2016.
- MPC: Finance Act 2016; six members; 4% ± 2% CPI target, now set to 31 March 2031.
- e-rupee: wholesale 1 Nov 2022, retail 1 Dec 2022.
- Current Governor: Sanjay Malhotra (26th, since 11 December 2024). Deputy Governors: Swaminathan J., Poonam Gupta, S. C. Murmu, Rohit Jain.
- Current affairs: RBI@90 concluded 1 April 2025; record surplus of ₹2,86,588.46 crore for 2025-26; Banking Laws (Amendment) Act, 2025 allows up to four nominees from 1 November 2025.
Preparing for a specific exam? See our guides for RBI Grade B, SBI PO and IBPS PO. For reading practice on economic topics, try Daily Reading.
Test yourself
Which body first recommended setting up a central bank called the "Reserve Bank of India"?
Show answer
Answer: (b) The Royal Commission on Indian Currency (Hilton Young Commission) made the recommendation in 1926.
On which date did the RBI begin operations?
Show answer
Answer: (c) The RBI began operations on 1 April 1935. The 1934 Act was its legal basis, and 1949 was nationalisation.
In which year did the RBI's Central Office move permanently from Calcutta to Bombay?
Show answer
Answer: (b) The Central Office moved permanently to Bombay (Mumbai) in 1937.
Who was the first Indian Governor of the RBI?
Show answer
Answer: (c) C. D. Deshmukh became Governor on 11 August 1943. Osborne Smith was the first Governor overall.
Up to which date did the RBI act as the central bank of Pakistan?
Show answer
Answer: (c) The RBI's role in Pakistan ended on 30 June 1948, and the State Bank of Pakistan began on 1 July 1948.
The Banking Companies Act, 1949 was later renamed as the:
Show answer
Answer: (b) It was renamed the Banking Regulation Act from March 1966.
Which of these institutions is still a wholly owned subsidiary of the RBI?
Show answer
Answer: (c) DICGC is still a wholly owned RBI subsidiary. The RBI's stakes in IDBI, NABARD and NHB passed to the government.
From which date were ad hoc Treasury Bills replaced by Ways and Means Advances?
Show answer
Answer: (b) From 1 April 1997, ending the automatic monetisation of the government's deficit.
In May 2026 the RBI's Central Board approved a record surplus transfer to the Central Government for 2025-26. Roughly how much was it?
Show answer
Answer: (c) The Board approved ₹2,86,588.46 crore on 22 May 2026. ₹2.11 lakh crore was the transfer for 2023-24, ₹2.69 lakh crore was for 2024-25, and ₹3.16 lakh crore was the Budget estimate for all dividends from the RBI, public sector banks and financial institutions.
Under the Banking Laws (Amendment) Act, 2025, in force for nominations from 1 November 2025, a bank depositor can nominate up to how many persons?
Show answer
Answer: (d) Depositors can name up to four nominees, simultaneously or successively. For lockers and articles in safe custody, only successive nomination is allowed.
Further reading
- RBI History, Volumes I to V: the RBI's official history in five volumes, from 1935 to 2008, free to read online. This is the most detailed account there is.
- History of the RBI, Volume I (1935–1951): the founding years, the war, Partition and nationalisation, chapter by chapter.
- History of the RBI, Volume V (1997–2008): liberalisation, the FRBM era and the run-up to the 2008 global crisis.
- RBI Chronology of Events: a period-by-period timeline from 1926 onwards. Ideal for quick revision before an exam.
- RBI Annual Reports: the RBI's yearly account of the economy and its own work. Recent reports are useful for the Economic and Social Issues paper.
- Report of the Expert Committee to Revise and Strengthen the Monetary Policy Framework (Urjit Patel Committee, 2014): the blueprint for inflation targeting and the MPC.
- RBI Speeches: speeches by the Governor and Deputy Governors, often the clearest explanation of current policy thinking.
- Duvvuri Subbarao, Who Moved My Interest Rate? (Penguin, 2016): a former Governor's readable inside account of running the RBI during the 2008 global financial crisis.
Sources
- IDBI Bank: About us: the 2003 Repeal Act; IDBI Ltd and the transfer of IDBI's undertaking with effect from 1 October 2004.
- RBI press release, 14 March 2019: IDBI Bank categorised as a private sector bank with effect from 21 January 2019, after LIC's stake purchase.
- BusinessToday, 14 October 2026: CCEA approval of the 60.72% sale to Fairfax; the government and LIC split; ₹81 a share; ₹52,878.08 crore; residual 15% and 19%; RBI fit-and-proper step.
- RBI: The Beginnings, 1926 to 1935: Hilton Young Commission 1926; Central Banking Enquiry Committee 1931; RBI Act, 1934.
- RBI: The Early Years, 1935 to 1949: 1 April 1935 start; Osborne Smith; CRR 1935; first notes 1938; Burma; Deshmukh 1943; 1946 demonetisation; Pakistan to 30 June 1948; nationalisation; 16 March 1949; 1949 devaluation.
- RBI: 1950 to 1960: Rural Credit Survey; SBI on 1 July 1955; selective credit controls; minimum reserve system.
- RBI: Institution Building, 1960 to 1971: deposit insurance; 1962 CRR and SLR changes; UTI; IDBI on 1 July 1964; co-operative banks 1966; 1966 devaluation.
- RBI: 1968 to 1985: social control; National Credit Council; 1969 and 1980 nationalisations; Lead Bank Scheme; RRBs; ARDC renaming; DICGC 1978; NABARD 1982.
- RBI: 1985 to 1991: Chakravarty Committee; statutory pre-emptions; money-market instruments; NHB 1988.
- RBI: Crisis and Reforms, 1991 to 2000: July 1991 devaluation; Narasimham Committee; prudential norms; LERMS and unification; current account convertibility; Ombudsman; BRBNMPL; Ways and Means Advances; FEMA.
- RBI: 2000 onwards: post-2000 chronology context.
- RBI About Us: Preamble wording; Central Office move to Mumbai in 1937; full government ownership.
- RBI: Nationalisation: nationalisation from 1 January 1949 under the 1948 Act.
- India Code: Reserve Bank (Transfer to Public Ownership) Act, 1948: compensation per share.
- RBI: list of Governors: names and tenure dates of all 26 Governors.
- RBI speech by V. Leeladhar, 2007: Banking Companies Act renamed the Banking Regulation Act from March 1966.
- RBI: Deposit insurance: DIC from 1 January 1962; merger into DICGC.
- Department of Financial Services: NABARD: NABARD from 12 July 1982; functions taken over; full government ownership.
- Business Standard: Government takes over NHB from RBI: NHB stake transfer effective 2019.
- PRS: SBI (Amendment) Bill summary: transfer of the RBI's SBI shareholding to the government in 2007.
- RBI: Report on Foreign Exchange Reserves, 2004: reserves of US$5.8 billion at end-March 1991, and later year-end levels.
- RBI Weekly Statistical Supplement, 11 September 2026: reserves of US$785,706 million on 4 September 2026.
- RBI Weekly Statistical Supplement, 23 October 2026: reserves of US$721,016 million on 16 October 2026.
- The Quint fact-check on 1991 gold: 46.91 tonnes pledged in July 1991 (citing a Rajya Sabha answer and the RBI Annual Report 1991-92).
- RBI speech on the debt market, 2006: FRBM ban on RBI primary subscription from 1 April 2006.
- RBI FAQ on the PSS Act: PSS Act dates and the Payments Regulatory Board.
- Digital India: UPI: UPI pilot launch on 11 April 2016.
- RBI Annual Report: Monetary Policy Operations: Monetary Policy Framework Agreement of 20 February 2015.
- RBI: Urjit Patel Committee report: committee mandate and report date.
- Business Standard: MPC constitution notified: MPC constituted on 29 September 2016; composition.
- Outlook Money: 4% target retained until 2031: inflation target notified for 2026–31.
- RBI press release, 8 November 2016: withdrawal of legal tender status of old ₹500 and ₹1,000 notes.
- PIB: Digital rupee pilots: e₹-W from 1 November 2022 and e₹-R from 1 December 2022.
- RBI press release, 11 December 2024: Sanjay Malhotra takes over as 26th Governor for three years.
- ETV Bharat: October 2026 MPC decision: Malhotra as Governor in October 2026; repo rate raised to 5.50%.
- RBI press release, 29 May 2026: Annual Report 2025-26: release date of the Annual Report 2025-26 (In the news, 29 May 2026).
- Outlook Money, 31 May 2026: RBI to expand digital rupee pilots: Annual Report 2025-26 on CBDC pilots in DBT schemes, MAS and UAE talks, cross-border plans; retail e-rupee ₹771.66 crore at end-March 2026 against ₹1,016.50 crore a year earlier.
- Morung Express (IANS), 29 May 2026: RBI expands e-rupee pilots: programmable PDS subsidies in Gujarat, Puducherry and Chandigarh; tokenised CD pilot settled in wholesale CBDC; Projects Rialto and Mandala.
- RBI press release, 22 May 2026: 623rd meeting of the Central Board: surplus of ₹2,86,588.46 crore for 2025-26; CRB kept at 6.5%; chaired by Governor Malhotra.
- RBI press release, 23 May 2025: 616th meeting of the Central Board: surplus of ₹2,68,590.07 crore for 2024-25.
- Business Today, 22 May 2026: record surplus falls short of Budget target: ₹3.16 lakh crore Budget estimate for dividends from the RBI, PSBs and financial institutions (Test yourself, question 9).
- Business Standard, 22 May 2024: ₹2.11 trillion surplus for 2023-24: ₹2,10,874 crore transfer for 2023-24 (Test yourself, question 9).
- RBI press release, 4 May 2026: Portfolios of Deputy Governors: Rohit Jain's assumption of charge and portfolio reallocation with effect from 4 May 2026.
- Angel One, May 2026: Rohit Jain appointed Deputy Governor: three-year term under Section 8 of the RBI Act; succeeds T. Rabi Sankar.
- RBI press release, 5 June 2026: Swaminathan J. re-appointed Deputy Governor for two years from 26 June 2026.
- RBI press release, 9 October 2025: Shirish Chandra Murmu takes charge as Deputy Governor for three years; his portfolios.
- Business Today, 29 September 2025: Murmu appointed: succeeds M. Rajeshwar Rao.
- RBI press release, 3 April 2025: Poonam Gupta appointed Deputy Governor: three-year term.
- PIB, October 2025: nomination provisions from 1 November 2025: Sections 10 to 13 of the Banking Laws (Amendment) Act, 2025 in force from 1 November 2025; up to four nominees; successive-only nomination for lockers.
- SCC Online, 1 August 2025: Banking Laws (Amendment) Act, 2025: the five Acts amended (RBI Act, BR Act, SBI Act, 1970 and 1980 Acts); first provisions in force 1 August 2025.
- Outlook Money: 4% target retained until 2031 and BIS: Poonam Gupta, "Inflation targeting in India": notification of 25 March 2026 under Section 45ZA; all features of the framework retained (In the news, 25 March 2026).
- BIS: Sanjay Malhotra, welcome address at RBI@90, 1 April 2025: RBI@90 commemoration function in Mumbai attended by the President; conclusion of the year-long celebrations; entry into the centenary decade.
- RBI press release, 1 April 2024: RBI commemorates its 90th year: opening event with the Prime Minister and release of a commemorative coin; the ₹90 denomination is from Aaj Tak, 1 April 2024.
(accessed 24 October 2026)