Reserve Bank of India — Definition

Definition

The Reserve Bank of India is India's central bank, responsible for monetary and other financial-system functions under its statutory framework. It began operations on 1 April 1935 under the RBI Act, 1934, and was nationalised in 1949.

Its work includes monetary policy, bank-note issuance and government banking, alongside regulatory and other responsibilities. It differs from a commercial bank serving ordinary retail customers. The inflation target, the policy rate and a household's lending rate are also distinct quantities.

Understanding RBI requires linking each function to its objective and legal basis rather than assuming that one institution makes every fiscal, banking and financial-market decision.