The Governor of Reserve Bank of India (RBI) Shaktikanta Das stated that the RBI has now evolved significantly over the years, wherein, RBI who was initially focused on allocating scarce resources during the planning era, has now transformed itself into a crucial enabler for the market economy.

“The Reserve Bank's evolution as an institution has been closely intertwined with the development of the Indian economy. From being a central bank primarily concerned with the allocation of scarce resources during the planning period, the Reserve Bank transitioned into being an enabler for the market economy. We are a full-service central bank, with our functions spanning multiple dimensions. It has been our endeavour to promote a financial sector that is robust, resilient, and future-ready,” said Das, while speaking at the RBI@90 event marking 90 years of the central bank on Monday.

Furthermore, the governor also highlighted pivotal reforms which include the enactment of the Insolvency and Bankruptcy Code (IBC) and the adoption of flexible inflation targeting in recent years. With these above stated reforms, it has enabled the RBI to mitigate banking system challenges so as to maintain price stability more effectively.

Additionally, the governor also highlighted that the RBI remains steadfast in its commitment to ensure a stable and robust financial system, thereby serving as the cornerstone of India's economic progress.

“The Covid-19 pandemic and the ongoing geopolitical hostilities have tested the resilience of every economy in the world, including India. The well-calibrated and coordinated monetary and fiscal policies adopted in our country went a long way in shielding our economy from these shocks and helped us to emerge even stronger than before. It's a matter of satisfaction that today our GDP growth is robust, inflation is moderating, the financial sector is stable, the external sector remains resilient, and the forex reserves are at an all-time high,” the RBI governor said.

History of RBI

If we look back at the history, the nation's central bank (RBI) was established in 1935 following the advice of the Hilton Young Commission.

This department commenced operations on April 1, 1935, governed by the Reserve Bank of India Act, 1934. RBI was under the stewardship of Sir Osborne Smith as its inaugural governor.

In its beginning, RBI operations included currency issuance and provision of banking services to banks. And in 1937, the Central Office of the Reserve Bank was relocated to Mumbai from Kolkata.

Over time, the RBI's mandate expanded significantly, encompassing monetary management, regulation and supervision of the financial system, management of foreign exchange, currency issuance, as well as oversight of payment and settlement systems.