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RBI REgulations Act

The document outlines key events in the history of the Reserve Bank of India from its establishment in 1935 until 1949, including the introduction of banking reforms, currency changes, and significant legislative acts. It highlights the transition of the RBI from a shareholders' bank to a nationalized institution, along with its evolving role in the Indian economy and banking supervision. Notable events include the demonetization of high denomination notes in 1946 and the introduction of the Banking Companies Act in 1949.

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7 views2 pages

RBI REgulations Act

The document outlines key events in the history of the Reserve Bank of India from its establishment in 1935 until 1949, including the introduction of banking reforms, currency changes, and significant legislative acts. It highlights the transition of the RBI from a shareholders' bank to a nationalized institution, along with its evolving role in the Indian economy and banking supervision. Notable events include the demonetization of high denomination notes in 1946 and the introduction of the Banking Companies Act in 1949.

Uploaded by

tfgneeraj
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Early Years - 1935 to 1949

Date Event

1 Apr 1935 Reserve Bank of India commences operations. Sir Osborne Smith the first Governor
of the Bank. The Bank was constituted as a shareholders' bank.

5 Jul 1935 Scheduled banks required to maintain the Cash Reserve Ratio, i.e., hold cash
balances with the RBI equivalent to 5% of their Demand Liabilities and 2% of their
Time Liabilities.

Oct 1935 London Office of the Reserve Bank set up. This was closed on September 30, 1963.

1 Nov 1936 Resignation of the first Governor, Sir Osborne Smith, wef July 1, 1937.

15 Jan 1937 Indian Companies (Amendment) Act, 1936 devotes a separate chapter exclusively to
Banks.

1 July 1937 Sir James Braid Taylor assumes office as Governor.

1937 RBI acts as banker to the Government of Burma and also responsible for note issue in
Burma.

Jan 1938 First Reserve Bank notes issued.

21 Jun 1938 The Failure of the Travancore National and Quilon Bank, the largest bank in the
Travancore region, underlined the need for comprehensive banking reform and
legislation.

3 Sep 1939 Introduction of Exchange Controls in India under Defence of India Rules.

11 Mar 1940 RBI Accounting Year changed from Jan-Dec to July-June.

1940 The silver rupee replaced by the quarternary alloy rupee. One Rupee note
reintroduced. This note had the status of a rupee coin and represented the
introduction of official fiat money in India.

11 Aug 1943 Sir C. D. Deshmukh assumes office of Governor.

1944 The security thread on notes introduced for the first time in India as a security
feature.

1944 Laws relating to Government securities and to the management of Public Debt by the
Reserve Bank of India consolidated on the basis of the Public Debt Act, 1944.

26 May 1945 Speculative activity in the financial and bullion markets. Defence of India Rules
invoked to authorise the Reserve Bank to collect information from banks in respect of
advances. This was to check advances against bullion for speculation.

9 Jun 1945 Reserve Bank of India entrusted with the Currency & Coinage of the British Military
Administration of Burma as well as Banker to BMA.

12 Jan 1946 High Denomination Bank Notes of Rs 500, Rs 1000 and Rs 10,000 Demonetised to
curb unaccounted money.

1946 Interim arrangements for Bank Supervision were put in place by ordinances which
were later replaced by the Banking Companies Act, 1949. These Ordinances
empowered the Reserve Bank to inspect banks, as well as authorise the licensing of
bank branches.

30 Jun 1948 RBI ceased to function as the Central Bank of Pakistan. State Bank of Pakistan
commenced operations wef July 1, 1949.

1 Jan 1949 Reserve Bank of India nationalised.

16 Mar 1949 Coming into force of the Banking Companies Act, 1949. This formed the statutory
basis of bank supervision and regulation in India.
The Statutory Liquidity Ratio (SLR) requiring banks to maintain liquid assets was
introduced for the first time. The Banking Companies Act was later renamed the
Banking Regulation Act.

1 Jul 1949 Sir Benegal Rama Rau assumes office as Governor

19 Sep 1949 Rupee devalued by 30.5 % as a defensive measure consequent to the devaluation by
other 'sterling area' countries.

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