Question

RBI was set up on the basis of the recommendation of
1. Indian Central Bank Enquiry Committee
2. Royal Commission
3. Simon Commission
4. Nehru Report

Answer 1

Correct Answer - Option 2 : Royal Commission

The correct answer is Royal Commission.

• The Reserve Bank of India was set up on the basis of the recommendations of the Royal Commission on Indian Currency and Finance also known as the Hilton-Young Commission.
• The Reserve Bank of India was established following the Reserve Bank of India Act of 1934. After that, RBI started its operations on 1 April 1935.
• Headquarters of RBI- Mumbai.
• The nationalization of RBI took place in 1949 and from January 1, 1949, RBI started working as a government-owned bank.
• First Governor: Sir Osborne Smith
• First Indian Governor: C.D. Deshmukh
• Current Governor: Shaktikanta Das

• The main functions of RBI are:
  • Note issuing organization and determine monetary policy, 
  • RBI controls the credit operations of banks through quantitative and qualitative tools,
  • Holds the cash reserves of all the scheduled banks,
  • Controls the banking system through the system of licensing,
  • Acts as the lender of the last resort