The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.
Functions Of RBI
Monetary Authority:
- Formulates, implements and monitors the monetary policy.
- Objective: maintaining price stability while keeping in mind the objective of growth.
Regulator and supervisor of the financial system:
- Prescribes broad parameters of banking operations within which the country’s banking and financial system functions.
- Objective: maintain public confidence in the system, protect depositors’ interest and provide cost-effective banking services to the public.
Manager of Foreign Exchange
- Manages the Foreign Exchange Management Act, 1999.
- Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
Issuer of currency:
- Issues, exchanges and destroys currency notes as well as puts into circulation coins minted by Government of India.
- Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
Developmental role
- Performs a wide range of promotional functions to support national objectives.
Regulator and Supervisor of Payment and Settlement Systems:
- Introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public at large.
- Objective: maintain public confidence in payment and settlement system
Related Functions
- Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
- Banker to banks: maintains banking accounts of all scheduled banks.
Offices
- The Reserve Bank of India has offices at 34 locations.
These 3 types of Bank Accounts will be Closed from 1 November 2025, RBI has Issued New Rules.
Bank Rules : The Reserve Bank of India (RBI) has announced new rules that will come into effect from November 1, 2025, aiming to make the banking system more secure, transparent, and user-friendly. One of the major changes is that account holders will now be able to add multiple nominees to their bank accounts — making it easier and faster for families to claim funds in the event of the account holder’s death.
According to the RBI, these new rules have been formulated in line with global banking standards and to enhance customer service. The main changes include the following:
Three Types of Bank Accounts to Be Closed
RBI has decided to close certain types of accounts that remain unused for long periods, as they pose a higher risk of fraud or misuse
| Type of Account | Closure Reason |
|---|---|
| Dormant Account | No transactions for 2 years |
| Inactive Account | ZERO customer-initiated transaction for 12 months |
| Zero Balance Account | Account remains open without any activity for a long period |
The RBI stated that these inactive or unused accounts are more vulnerable to misuse. Hence, closing them will enhance the safety and integrity of the banking system.
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