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Presented By-
Heena M. Shaikh
M-Com Part-1
Div- A R.No- 31
Year 2019-2020
INTRODUCTION AND ORIGIN OF CENTRAL BANK
• The Development of ‘Banking’ is evolutionary in nature. There is no single answer to the question of what is
banking. Because, a bank performs a multitude of functions and services which cannot be comprehended into
a single definition. For a common man, a bank means a Storehouse of Money, for a Businessman it is an
Institution of Finance and for a Worker it may be a depository for his Savings.
• The Origin of the word Bank can be traced as follows:
BANCK- German (Joint Stock Fund)
BANCO- Italian (Heap of Money)
BANCUS/ BANQUE- French (Bench/ Chest a place where valuables are kept)
BANK - English (Meaning i.e., as an institution accepting money as deposit for lending)
RESERVE BANK OF INDIA.
• The Reserve Bank of India (RBI) is India's central banking institution, which controls
the issuance and supply of the Indian rupee. Until the Monetary Policy Committee was
established in 2016, it also controlled monetary policy in India. It commenced its
operations on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934. The
original share capital was divided into shares of 100 each fully paid, which were initially
owned entirely by private shareholders. Following India's independence on 15 August
1947, the RBI was Nationalized on 1 January 1949.
• The bank is often referred to by the name 'Mint Street'. RBI is also known as banker's
bank.
• PREAMBLE- The preamble of the Reserve Bank of India describe the basic functions
of the Reserve Bank as “To Regulate the issue of Bank Notes and keeping of reserve
with a view to securing monetary stability in India and generally to operate the currency
and credit system of the country to its advantage.”
THE HISTORICAL ANTECENDENTS OF CENTRAL
BANKING IN INDIA
• In India, the efforts to establish a banking institution with central banking character
dates back to the late 18th century. The Governor of Bengal Warren Hastings in
British India recommended the establishment of a General Bank in Bengal and Bihar.
The Bank was set up in 1773 but it was short-lived.
• The Bill to establish the RBI was introduced in January 1927 in the Legislative
Assembly, but it was dropped due to differences in views regarding
Ownership, Constitution and Composition of its Board of Directors.
• Finally, a Fresh Bill was introduced in 1933 and passed in 1934. The RBI Act
came into force on January 1, 1935. The RBI was inaugurated on April 1, 1935
as a Shareholders’ Institution and the Act provided for the appointment by the
Central Government of the Governor and Two Deputy Governors. The RBI
was Nationalized on January 1, 1949 in terms of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948 (RBI 2005b).
FIRST CENTRAL BOARD OF DIRECTORS
GOVERNORS OF RBI:
• First Governor of RBI: • Present Governor of RBI:
Sir Osborne A. Smith Shaktikanta Das
April 1, 1935 to June 30, 1937 December 12, 2018 Onwards
ORIGINAL HEADQUARTERS OF RBI