INTRODUCTION

Central bank occupies a special place of significance in the monetary system

of a country. As the apex authority, the central bank regulates and monitors
thee banking sector and other financial institutions. The central bank have
been in existence since the 1650s. RBI has central bank in India. The Reserve
Bank India.
The Reserve Bank of India was established in 1934 through the reserve bank
of India Act 1934. It started its operations as a private shareholder bank from
1st April 1935. Its was nationalised in 1949. The Reserve Bank of India is the
central Bank of India entrusted with the multidimensional role. It performs
important monetary functions from issue of currency note to maintenance of
monetary stability in the country. With the introduction of LPG in 1991. The
role of RBI has become all the more significant.
While implementing its policies and reforms, the bank has to ensure price
stability with economic growth and sustainable development. The
development in various institutions like industrial finance corporation of India,
IDBI, NABARD etc.
Its affairs are governed by the Central Board of Directors appointed by the
Government of India. Since its inception the Reserve Bank of India had played
an important role in the economic development and monetary stability in the
country.
Composition of Central Board
The Central Board consists of Governor, deputy Governor, Ten Director
nominated by the Central Government and two Government official
nominated by the Central Government. The deputy Governor and Director are
eligible to attend meeting of the Central Board but are not entitled to vote. The
Governor and deputy Governor hold office for term of five years and are
entitled for a re - appointment. The Directors are appointed for a term of four
and hold office during the pleasure of the president. The meeting of the
Central Board is convened at least six times in a year.

DIRECTOR
BOARD

NON- OFFICIAL
OFFICIAL MEMBER MEMBERS
(RBI -5) GOVT. NOMINATED
(14)

4 DEPUTY 4 DIRECTORS FROM

GOVERNOR
GOVERNORS LOCAL BOARD
Composition of Local Board
A local board is formed in each four zones consisting of five members which
are appointed by the Central Government. There is Chairperson of the Board
who is elected among the member. The members of the Board have a hold
office for a term of four years and eligible for reappointment. The Local Board
advice on matters referred to it by the Central Board and performs duties
delegated to it by the Central Board.

Functions of Reserve bank of India

Functions of may be summarized as given below:
Banker to Government :-
The Reserve Bank of India accepts and makes payment on behalf of Central
Government. It carries out its exchange, remittance, management of public
debt and other banking function of the Central Government. The Central
Government entrusts its money, remittance, exchange and banking
transactions in India with the Reserve Bank of India. It deals in repo or reverse
repo.
Bank of issue :-
Central bank has the monopoly issue. This exclusive right enable the central
bank control and regulate supply of currency and credit supply and thereby
ensure stability. The Central Government on the recommendation of Central
Board specifies denomination of bank notes including discontinuance of bank
notes. The Central Government approves design, form and material of Bank
notes on consideration of recommendations of the Central Board.
Banker’s Bank
The banks listed in second schedule and non schedule banks shall maintain
a cash reserve ratio with the Reserve bank of India with a view to securing the
monetary stability in the country. It provides loans and advances in foreign
currency to scheduled Banks and to other financial institution. It purchases,
sells or discount any bill of exchange or promissory note or makes a loan or
advances to schedule bank.

Custodian of foreign exchange reserves

All the foreign exchange reserves of the country are maintained and
controlled by the central bank. As a custodian it regulates the flow of foreign
exchange to the various sectors and needs according to priorities. This function
facilitates the central bank to maintain stability of the exchange rate.

Central clearing house

All commercial bank maintain an account with the central bank. This
enables them to settle their interbank claims without using cash and the
transactions are carried out quickly. They park their surplus deposits with the
central bank
Research methodology

The study is purely based on primary data and secondary data. The study will
be conducted with reference to the relate to role and function of RBI.

Review of literature

1. According to the “ Rajesh B.D.” MAY (2021): They explain the

commercial bank role on private banks. RBI was merely credibly
introduces the lender and the borrower, and facilities recovery,
objectives.

2. According to the “ Nisar khan and Rahmatullah (2014) : Have made

attempt to examine the performance of the schedule commercial banks
in general public sector bank in particular during the post reform period
said private banks, foreign banks and their performance within other
bank’s countries.
 3. According to the “Mandeepkour Bansal (2017) : The Reserve Bank of
India is the central bank of India main entrusted with the
multidimensional role. Mainly explain role of reserve bank of India in
Indian economy. Reserve bank of India role, function and contribution of
RBI in Indian economy.

REFERENCE
1. Arun, T. G, Turner, J. D (2002) “Financial Sector
Reforms in Developing Countries: The Indian
Experience”; World Economy; (March 2002, Vol. 25
Issue 3), (Pg 429-435)

2. Bhatt O.P. (2007) “Banking In India”; Yojana; (August,

2007) (Pg. No. 83-87)

3. Mandeep K.B, Ph. D “Role of Reserve Bank of India in

Indian Economy” (2014-2017)

According to Nisar Khan and

Rahmatullah (2005): have
made an attempt to examine
the
performance of the schedule commercial Banks in general public sector
Banks in
particular during the post refrom period said private Banks , foreign Banks
and their
performance within other bank's countries.
Objectives and Research Methodology
Objectives of study:
1. To explore the evolution of Reserve Bank of India (RBI).
2. To analyze the role and functions of RBI.
3. To assess the Monetary Control Methods of RBI.