RBI @ 90: Central bank has evolved with functions spanning multiple dimensions today, says Governor Shaktikanta Das

As the Reserve Bank of India (RBI) entered its 90th year of commercial operations on Monday, April 1, 2024, Governor Shaktikanta Das said the evolution of the central bank as an institution has been closely intertwined with the development of the economy. "From being a central bank primarily concerned with the allocation of scarce resources during the planning period, the RBI has transitioned into being an enabler for the market and the economy," the RBI chief said in his keynote address at a special ceremony organised in Mumbai to commemorate the milestone.  

"We are a full service central bank with functions spanning multiple dimensions," Das said. 

Here are some highlights of what the RBI governor said: 

• It has been our endeavour to promote a financial sector that is robust, resilient and future-ready

• RBI remains focused on ensuring a stable and strong financial system

• Such a financial system will act as a bedrock of the country's economic progress

Speaking at the event, Prime Minister Narendra Modi said the RBI's Monetary Policy Committee (MPC) has worked very well on targeting inflation. 

"We have to work towards making the Indian rupee more acceptable globally," the Prime Minister said. 

He also said that new technologies like Artificial intelligence (AI) and blockchain have transformed banking.

Finance Minister Nirmala Sitharaman said the central bank has been able to stabilise government security (G-Sec) yields despite monetary tightening.The RBI has been successful in anchoring inflationary expectations, the finance minister added. 

Established in 1934, the RBI functions as the nation's central bank, following the recommendations of the Hilton Young Commission and governed by the Reserve Bank of India Act, 1934.

The central bank began operations on April 1, 1935. Over the decades, the RBI's role has expanded to cover monetary management, regulation and supervision of the financial system, management of foreign exchange, currency issuance, regulation and supervision of payment and settlement systems, and developmental roles. 

The RBI is one of the few central banks to document its institutional history.

As of March 2024, the RBI has released four volumes of its history:

• Volume 1 (1935 to 1951): Published in 1970, the first volume details the initiatives taken to put in place a central bank for India and covers the formative years of the RBI
• Volume 2 (1951 to 1967): Published in 1998, the second volume covers a period heralding an era of planned economic development in the country; it captures the initiatives taken to strengthen, modify and develop the economic and financial structure of the country
• Volume 3 (1967 to 1981): Released on March 18, 2006, this volume covers a pivotal point for the domestic economy: the nationalisation of fourteen banks in 1969 leading to the spread of banking in the country’s hinterland
• Volume 4 (1981 to 1997): Released in two parts on August 17, 2013, the fourth volume covers the eventful 16 years that saw the transformation of the country's banking system with liberalisation and improvement in credit delivery

With inputs from agencies