Question

Why and how the reserve bank of india was established?

Answer 1

Answer:

reserve bank of india was established in 1934. it is established by the act of parliament which reserve bank of india act 1934 and RBI also receive power via banking regulation act 1949.

The RBI was established to regulate the banking system in our country and except this the RBI has many functions such as controller of credit, formation of monetary policy , lender of last resort, RBI has the sole authority to print all notes except re. 1 note and all the coins. RBI regulates the banking system and also monitor them on a daily basis to sutain a fair work by the banks.

RBI plays key role in the banking sector and also control the money supply in the economy by various policy rates i.e. CLR , SLR REPO RATE , etc.